Debt Reduction Strategies for Better Financial Health
Brought to you by Your Money Line
Paying off debt is a step towards a healthy financial life, yet knowing how to pay off debt is tricky. Below are a few key debt reduction strategies that can help you start living debt-free sooner.
- Utilize the Momentum Method.
Debt can take a long time to pay off, and it can be hard to stay motivated. We believe the Momentum Method will keep your moral high while keeping you on the right path. Your Money Line offers a debt momentum chart, where you can list all your debts with balances and minimum payments. Once you’ve listed them, the chart will automatically organize your debt from lowest to highest. If you currently pay more than the minimum payment on any of your debts, you need to change the amount you pay to the minimum payment. Then identify any extra money you can put towards the lowest balance debt each month. This will give you an intense focus and help you pay off an entire debt. With every debt you pay off, you can dedicate more funds to the next debt.
- Create a Money Plan.
Making a plan for where all your money will go is a great way to visualize your debt. Write up a budget, including your income, fixed expenses and even occasional expenses like your bi-monthly trash bill. Be sure to consider your flexible expenses like groceries, gas, entertainment, etc. and include all debt as well. Try to make it as simple as possible so you’re more likely to stick to it.
- Use a Debt Repayment Calendar.
Create a repayment calendar that allows you to visualize how long your debt repayment will take. Using a calendar to repay debt will help you stay on top of it and submit payments on time. Having a specific debt-free date can be motivating!
- Meet with a Your Money Line Financial Guide.
If you need more one-on-one personalized guidance, the Your Money Line Financial Guides are always here for you by phone, email or chat! They help members every step of the way to becoming debt free and can help you determine the best course of action. Visit the Your Money Line page to get started.
- Don’t forget to save.
As you are paying off debt, it's important to remember to save for unexpected emergencies, too, so you don't go further into debt. Opening a Benefit Accumulation Account (BAA) for $25 and setting up a recurring payment of even $20 per month is a great way to build an emergency fund for life's unexpected events. All Pension Fund members have easy access to open a BAA in less than 5 minutes inside the Member Portal.