The holiday season is filled with quality family time, new year resolutions, and unfortunately damage to your wallet. Whether you spent money on gifts for your family and friends, or even yourself, it is important to begin paying down any debt you may have accumulated this holiday season. To take charge of your financial future, follow this list of efficient ways of debt payment to pay off debts in 2024.
The best strategy for paying down debt in 2023
Paying down debt can be hard, but it’s an important step to take to maintain financial stability. Let’s look at what you can do this year to support your debt payment plan.
1. Start with a plan. Base the money you earn and your budget on what is a need vs. a want
Get your spending under control by categorizing your income into categories including necessities (rent, car payments, groceries), obligations (minimum payments on credit card), and wants (restaurants, entertainment, coffee).
2. Look over expenses
Regularly comb through your budget and re-evaluate what exactly your money is going towards. After finding possible expenses to cut, consider shifting this money towards your debt reduction.
3. Find ways to dedicate more money to wiping out debt
Look over your monthly spending and find opportunities to cut spending to get more savings out of your budget. And don’t ignore the small cuts, as these can add up faster than you think. For example, finding a way to put aside an extra $200 will add up to a yearly $2,400 that can be put towards paying down debt.
4. Consider picking up a side hustle
Having an extra income stream will help you pay off your debt more quickly. This can be difficult to manage depending on the intensity of your current occupation and work hours. However, some jobs can be done online and have flexible hours to help accommodate your schedule.
5. Get yourself into good financial habits
Consider ways you can modify your daily spending routine without sacrificing your lifestyle. This could include replacing your daily purchase of a latte by making your cup in the morning. Consider bringing a lunch from home to work instead of buying food during the week.
Stick with your new plan until your debt is paid off. Follow through with what you’ve decided and reward yourself when you reach milestones. Once you’re able to reach a goal, it is rewarding to continue this progressive mindset for your future financial endeavors.
Conclusion
We hope the above steps will help you pay off debts and become debt-free this year. If you are a medical professional and are looking for a way to manage your finances so that you can focus on matters that matter to you most, PRIME Financial is the platform for you. We provide personalized financial planning for doctors, including tax, accounting, and creative solutions designed to help you achieve your goals and have time on your side to enjoy life.
Sources : 1. https://www.forbes.com/advisor/debt-relief/debt-free-in-a-year-steps-and-strategies/ 2. https://www.forbes.com/advisor/banking/saving-vs-paying-down-debt/
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