Best Ways to Pay Off Debt That Are Easy on Your Wallet

Excessive debt can be intimidating, especially when attempting to find a way out. When making only monthly minimum payments, it can seem like the debt will take forever to pay off. So for many, the best solution becomes just not thinking about it.

This is not the best course of action.

Although there are no quick fixes, there are options. Some of the best ways to pay down debt are painless. Here are a few ideas that include the best ways to pay off debt.

Renegotiate Interest Rates

An easy action to reduce your debt is to renegotiate the interest rates on your credit cards. Call the customer service representative number on the back of your credit card. Explain that you are dissatisfied with your current interest rate and would like to know if there is a way to get it lowered. If the customer representative won’t help, ask for a supervisor.

Here are some other methods for the best ways to reduce debt:

The Snowball Approach

Massive snowballs start with a handful of snow; so does your debt reduction plan. Begin by working on paying off your smallest debt first, then continue until you have paid off your largest debt. The first step is to write a list of your debts and the amounts you owe, from least amount to largest amount:

$455 store charge card ($45 payment)

$2,000 medical bill ($60 payment)

$5,250 credit card ($140 payment)

$12,000 student loan ($226 payment)

Start by making minimum payments on all your debts, except the one with the lowest amount -store charge card. Every month for this card make as large a payment as you possibly can. When that card is finally paid off, use the same steps and pay as much as you can toward the next lowest debt – the medical bill. Redo these steps until you are able pay off your largest debt – the student loan.

Biweekly Mortgage Payments

The next step is one of the best ways to reduce debt for larger issues. A good technique to produce big savings and more financial well-being is by making biweekly mortgage payments.

In this scenario you pay half your regular mortgage payment every other week instead of the entire payment once a month. With this technique you’ll be paying 13 yearly payments rather than 12.

Your mortgage payment will increase by 1/12th, but the additional amount goes toward your principal. You never pay interest on any part of the mortgage you pay off early. The amount you save can quickly add up.

With a 30-year mortgage for $272,000 at 4.25% APR, this option alone can save you more than $34,000 over the span of your mortgage. You could be paying off your mortgage five years early! The biweekly payment plan also works for other loan types.

Debt Free Living Is Abundant Living

Abundant living is the overflow of resources to live without debt, and having enough to give to anyone who asks, to build your savings now and to invest in the future. Lack or not having enough or needing more, are not Kingdom values. No one has to live in lack the scriptures speak against lack. The Lord is my shepherd I shall not lack or want for anything, you also will have an abundant life and it will be, full and prosperous, and free from debt.

Abundant living is not about how much money is in your bank account or how much wealth you can show off. It’s about moving from a mindset that is prevalent in our culture, our community, and our society. We esteem lack, we don’t call it lack and we will never admit it openly, but every time we spend and we use our credit card our lack is seen, and the more credit cards we have the more lack there is in our lives. When we spend energy, our time, or our talent on purchasing stuff, we live in a place of lack. We are customers, consumers who live for the latest trainers or the biggest HD TV, the flashiest car. We live our lives as consumers. Consumers have no power, and they leave no legacy for the next generation.

Its time to flip the switch, to reevaluate your thinking, your beliefs, your actions, it is time to change, it is time to be transformed, by the renewing of your minds, to see yourselves differently as creators of wealth, a people of power, and abundance. To view yourselves as producers and landowners. To see yourselves as the head and not the tail. We sing it and we quote it enough but unless there is a change in your mindset there will never be a change in your outer circumstances.

A life of abundance, the ability to have more than enough, the ability to give over and above, whether that’s financially, emotionally or materially. To be in that position of owing no man or woman anything but a debt of love, is the objective we aim for by breaking free from the mindset of lack, and not having enough. To live joyously, and wisely in a life of over flowing with more than enough, in abundance.

Your propensity and leaning, your mentality of not having enough, your constant fear of losing what you have got has to change. Only then will you be able to view any appeal or request for your time, finance or resources, not as a threat, thinking that if I give you something then I won’t have enough for myself, but rather as an opportunity to give so that you can receive for yourself more than you can possibly need. This lack that I am talking about is generally known as Credit Card debt, you must get free from anything that facilitates the growth of debt in your life, namely, your Credit Card.

You have been taught from an early age, that banks and other financial institutions are honourable, and trustworthy pillars of our society, so when the Bank offers you your first credit card, you are filled with a certain pride that you have been considered credit worthy, but this pride, fills you with a false sense of security, because you think, if the Bank wants to lend me money, I must be doing alright. You need to stop thinking this way, but it is very difficult to break a life time of habit. The Bank over the years nurtures us, and begins to tell us what we need, that we can have that need met now, it encourages and fosters, a sense of lack and want within our lives, which is the exact opposite of abundant life, living out of a surplus of resources. Buy now pay later, the Bank says, use this credit card and pay no interest if you clear the debt in the same month. In this way you are drawn into a world where you are sold the idea of the “minimum payment”as the way to enable you to have whatever your heart desires and to fulfill all your dreams now. You put your trust and faith in your Bank and its representatives, who reward you by increasing your credit limit, and extending your loan and overdraft facilities to help you out of any short term difficulties or unexpected financial needs you may have overlooked. In this way the bank facilitates and promotes debt within your life.

Misplaced trust causes you to continue in this way, unable to help your self or any of those you love, friends or family. Misplaced trust keeps you wanting and in need in debt, never satisfying the real need that you have which is for contentment, being satisfied with what you have.

You can be satisfied by the Creator of Heaven and Earth, the One who placed every star in its place and whose Word holds every planet in its orbit trust that He is able to supply all your needs according to his riches in Christ Jesus. Trust that if you invest in anything to do with His Kingdom, that He is more than able and willing to look after what is yours. Then abundant life begins to transform your reality from lack to satisfaction, from debt to being free from debt.

Dealing With a Judgment on Your Credit Report

When trying to move about in the land of credit, those among us with checkered repayment histories will often find their travels to be rather arduous. There are many components to a credit file, and whenever one of those falls into disrepair, it behooves the individual to see what he might be able to do in order to rehabilitate that item and resume functional access to all that good credit provides. As this column has noted before, in addition to the more obvious benefits well-served by having good credit, it can now make the difference in what rates you pay for insurance, and even if you can land that job for which you’ve been desperately vying. The fact is that one’s credit history has, over time, become a yardstick by which to measure personal integrity, fair or not, so it is essential that you do everything you can to ensure that yours is as “pure” as it can be.

This said, there is one type of credit report entry that can prove especially troublesome to address – the judgment. Although the presence of judgments are generally subject to a seven-year time limitation, they are severe enough in appearance that many people would like to find a way to make them disappear more quickly; plus, because judgments can typically be renewed by creditors (the specifics of this will vary by state), there is always the chance that a judgment will re-appear on your credit after the original seven-year clock has wound down. Although there are things that can be done more readily to directly mitigate, even remove, other kinds of items on a credit report, judgments are a particular nuisance… so is there anything that can be done?

What differentiates judgments from “garden-variety” collection items on a credit report is that a judgment is representative of a court action, which means that the judgment becomes a part of one’s file not out of deference to the creditor who initiated legal action, but at the behest of the court. Once a collection matter moves from being a two-party issue (the debtor and the creditor) to a three-party issue (with the court added), the court becomes the 800-pound gorilla in the room. The only way to get a judgment removed from a credit report is to go through the legal process necessary to have it vacated, and that takes the help of an attorney, which also means time and money – plus, having a judgment vacated is simply a tall order.

So what are the options? Other than waiting for the judgment to eventually fall off of the report (and hope that it does not reappear), you might want to see about settling it… or paying the amount due outright, if that’s small enough… in exchange for a satisfaction of judgment. It is up to the creditor to file the satisfaction with the court, so before paying anything, be sure you have the creditor agree in writing that the satisfaction will be filed as a condition of your payment. In the case of paying a judgment, even a small one, it is smart to involve an attorney – even though it is not necessary, and will cost you some additional bucks to have one help you with the process, the benefit and weight of legal representation in the creation and review of the settlement agreement, as well as in pressuring the creditor to live up to the terms of the agreement, if necessary, can certainly be worth the money.

The information contained here is for general information purposes only. Bob Yetman disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this article should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.