Cut The Debt In Half

Nearly everyone you know is struggling with debt, whether it’s student loans, mortgage payments, or a long line of credit. Motivation to achieve career goals is almost non-existent when you have monthly statements to contend with. Interest rates are through the roof these days and we feel like we’re held hostage by our bills.

Beyond seeking financial advice for our debt, there are ways you can reduce your monthly numbers on your own.

Here are some tips on how to significantly cut back your debt:


Create a budget - Based on your current income and the minimum payments you’ve been affording, write up a budget spreadsheet and list of goals for your monthly criteria. Factor in all of your living expenses and what can be reduced in order to save you money that can be put towards the debt. For people living hand to mouth and scraping by, it’s especially important to have all of your daily/weekly/monthly costs in writing so that you can figure out a plan to distribute your earnings and still meet your goal. Be honest about what you can afford and what qualifies as a necessity so that you’re not over estimating your wallet and coming up short.

Don’t impulse buy - All window shopping habits must cease and desist when a tight budget and a looming debt line is in view. If you can’t treat yourself to the goodies, don’t taunt your inner shopaholic with them. Do yourself a favor and avoid trips to the mall or shopping excursions until you’re in the clear.

Use bonus cash towards debt - Extra pocket change goes a long way towards paying off the credit card. Whatever you get from birthdays, holiday occasions, tax refunds, and that old hand bag you found in your closet, make it all part of your debt recovery. When you’re living from pay check to pay check, you can’t afford not to. Every little bit counts.

Snowball - Alright, this method is for the expert debt inducers who know how to swipe more than a few cards. With multiple accounts on the rocks you need a good system to work with that will help you work towards your payments with minimal stress. The snowball method suggests that you start from the bottom and work your way up; that is, start small.  Sort of. Line up your debt amounts according to smallest and largest, and pay off the smallest amounts owed first. You’re considering the overall debt amount, though, not the interest rates. Commit to paying the minimum charge owed and then once that debt is covered, take that minimum payment and tack it on to the next smallest debt amount in addition to that interest charge. The theory is that the extra minimum payments of the previous card ‘snowballs’ towards the other debt charges and eventually reduces the overall debt quicker. Plus, working in smaller increments first before going head strong with the largest decreases your anxiety about your financial situation and puts it into perspective for you.

Discontinue use - Stop using your cards! If you want to cut your debt in half, perhaps you should start with cutting your cards in half. Literally. Make it a symbolic gesture. Invite your friends over, grab a pair of scissors, and have a credit card cutting party. Don’t add unnecessary expenses to your already sky high pile of charges.

Courtney Gilmour
		About the author:
		Courtney is a published writer, stand-up comic, and shameless Internet enthusiast. She holds a double bachelors degree in English Literature and Communication Media Studies, specializing in semiotic theory, however she doesn't get Shakespeare and has never won a game of Scrabble. Currently she lives in Toronto and works as a writer for WOMAN.CA.
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