7 Tips For Reducing Debt In 2022

 Debt is the four letters that most of us want to avoid. I say a lot because there are both good and bad costs. For example, your mortgage will be considered a good debt because it will generate income and increase your net worth as its value increases. 

Unfortunately, debt becomes a reality for most of us at some point in our lives. A recent report showed that almost 80% of Americans are in debt. And that's not surprising considering the cost of living these days. However, there are many ways to reduce existing debt and avoid taking on new debt. Let's explore some tips and get rid of our debt! 

To begin, list all your debts, income and expenses. You are ready to take charge and pay your bills. 

1. Consolidate your debt - talk to a financial advisor and create a plan together to pay off your current debt. One of my favorite tips is to use or open a low credit score or low credit card that can be used to pay off credit cards and home loans. They will be combined into one low-interest account, so you only have to pay that one month. Talk about something simple.

2. Pay off high-interest credit cards first. And, always make sure that you pay more than the interest every month, otherwise you will not repay the loan (principal), only the interest. 

3. Paying weekly or bi-weekly vs. every month. You'll be surprised how quickly you can pay these bills. I did this with my mortgage and my mortgage would be paid off faster than if I paid monthly.

4. Increase your income: Ask for that long-awaited raise, or get a second job or part-time job. Even something as small as a weekly book tour schedule can help.

5. Advertising: This practice has been very popular for some time and is still going strong. Declutter your home by getting rid of things you no longer need, use or love.

6. Only buy the essentials. Make a list of what you want and know what you have. Tip #5 will help you know exactly what you have and avoid unnecessary expenses.

7. Create a separate savings account and have a portion of your payment automatically deposited into that account on payday. This way, you won't have to worry about whether you can use the money to pay your bills.