Last year, I was able to wipe out my credit card debt, and this is something that I am truly proud of. It ballooned to be close to a million pesos, since I wasn’t following my own golden rule, which was to separate personal finances from business finances. Before I knew it, I was getting eaten up by interest. This is the reason why you should manage your debt immediately.
Managing your debt will give you peace of mind. I read in this article that nearly two-thirds of all marriages start off in debt. This may be a cause of stress in a marriage — from spouses hiding expenses from each other to not being able to fulfill dreams and plans and not being able to reach retirement peacefully.
How I dropped my Credit Card Debt to Zero
For full disclosure, I am not a financial advisor. I’m just a regular mom with a daughter and another baby coming soon. My husband and I run our own tech startup company, but we also “freelance” on the side as speakers, business consultants and content creators.
So now that you know a little bit about us, here are the things that I did.
Study more about managing debt. If you want to finally manage your debt, you need to understand different methodologies and terminologies, how to consolidate debt, ways of paying off debt, etc.
List down all of the debt that you have including the interest rate. Oftentimes, we just look at the amount that we owe, and we fail to see that what’s eating us up are the interest charges we incur every month. It’s good to write these down so that you have something visual to refer to. Our credit card statements are really unclear and so long that it confuses a lot of people, so check and read each item and the conditions clearly.
Don’t rely on your paycheck. What we did was to look for other sources of income that can at least pay off our credit card debt. We didn’t rely on setting aside an amount from our paycheck. This allowed us to pay our debt faster.
Look for loans with lower interest fees. Another thing that you can do is seek out a loan to be able to pay off your debt with higher interest rates. There are other credit card companies that offer balance transfers and even offer cheaper interest rates. So look at the rates!
So these are most of the things that we did to pay off our credit card debt.
How about you? Do you have tips to share with us? How do you manage your debt immediately?