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Making extra payments towards your high-interest debt is a smart strategy for reducing the amount of money you pay in interest over time. By paying more than the minimum payment each month, you can make a significant dent in your debt and get closer to becoming debt-free. Here are some tips for making extra payments towards your high-interest debt:
Automate your payments: Consider setting up automatic payments to ensure that you're making the extra payment each month. This will help you stay on track and avoid missing payments. I do this via online bill-pay via my bank's website.
Round up your payments: If you don't have a large amount of extra money available each month, consider rounding up your payments. For example, if your minimum payment is $100, you could pay an extra $50 to bring your total payment to $150.
Put any extra money towards your debt: Whenever you receive extra money, such as a bonus or tax refund, consider putting it towards your high-interest debt. This can help you make a significant dent in your debt and get closer to becoming debt-free.
Create a budget: By creating a budget, you can identify areas where you can cut back on spending and allocate more money towards paying off your high-interest debt. I prefer budgeting-by-paycheck budget forecast. AKA the Budget For Freedom (BFF)
Consider a debt management plan: If you're having trouble making extra payments on your own, consider working with a credit counselor (or a high-interest-debt-fighting financial coach ;) ) to create a debt management plan. This can help you make extra payments, reduce your interest rate, and become debt-free more quickly.
By making extra payments towards your high-interest debt, you can reduce the amount of money you pay in interest over time and get closer to becoming debt-free. Remember, the key to success is being consistent and sticking to your debt repayment plan, even when it's challenging.