3 Smart Ways To Payoff Debt In Less Than One Year

There’s no denying the fact the in today’s tough economy many are in debt. However many are also looking for ways to combat this debt and pay it off any which way they’re able to. Even though looming debt can seem to be something unmanageable, it can be quite manageable when a plan of action is put into place and the right tools are used. Let’s take a look below at three methods you can use to pay off debt in less than one years time.

1. Create An Action Plan

One of the first things you might want to consider doing is to create an action plan to get your goals going in the right direction. If you wish to payoff your car note and need about $5,000 to do so, then you need to do some math and calculate how much and how long it would take to pay off in less than a year. Once you figure out what it would require, then you can set an action plan to start the payoff process. This could be saving $200 a week for X number of weeks till you reach the goal. Or it could simply mean knowing ahead of time what the amounts and days look like to reach the end result.

2. Start A Debt Fund

If you’re not in debt but plan to buy a high ticket item soon, such as a car or home. Then you can set up a debt fund. A debt fund is exactly what it sounds like, a monetary stash that you repeatedly add money to in order to fund a certain cause or goal. In this case, it would be to fund the debt payoff.

3. Borrow To Pay It Off

Although this may not sound attractive at first, it all depends on how where and how much you borrow. If you borrow at a good interest rate or borrow from family and friends, then this might not be a bad proposition for you at all. Keep in mind that the purpose of the loan is to payoff existing high interest debt and to reduce your overall debt portfolio. If you have a $50,000 loan that is sitting at a high interest rate, borrowing to pay this debt off, could be a smart move on your part. Just make sure you read the fine print before you sign on the dotted line and then after work on paying off what you borrowed. Loans are not necessarily a bad thing, it’s when you have interest debt that can possibly get you in hot water. However loans in and of themselves can help you acquire things that most of us can’t afford outright in cash, such as a home. So keep your credit clean, to keep the debt monster lean. Guest author BIO: Missy Diaz writes for a universal life insurance website and blogs about personal finance topics ranging from frugal living to real estate.

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