If you have debt, you’re not alone. In fact, according to a recent study, the average American has $38,000 in personal debt, excluding home mortgages. That’s a lot of debt!
But not all debt is created equal. Some types of debt, like student loans and mortgages, can actually be beneficial to your financial health. Other types of debt, like credit card debt, can be very costly.
One type of debt that falls somewhere in the middle is paced debt. Paced debt is a type of debt that allows you to make payments at your own pace, without incurring late fees or penalties.
Paced debt can be a great tool to help you get out of debt, as long as you use it wisely. Here are a few tips on how to use paced debt to your advantage:
Make a plan.
Before you begin making payments on your paced debt, it’s important to have a plan. You should know how much debt you have, what your interest rates are, and how much you can afford to pay each month.
Creating a budget can help you get a better handle on your finances and make sure that you’re making the best use of your money.
Make more than the minimum payment.
If you only make the minimum payment on your paced debt, it will take you longer to pay off the debt and you’ll end up paying more in interest.
Instead, try to make more than the minimum payment each month. Even an extra $50 or $100 can make a big difference in the amount of interest you’ll pay and how quickly you’ll be able to pay off the debt.
Pay off high-interest debt first.
If you have multiple types of debt, it’s important to focus on paying off the debt with the highest interest rate first. This will save you money in the long run and help you get out of debt more quickly.
Use extra money to make extra payments.
If you get a bonus at work or a tax refund, don’t be tempted to spend it. Instead, use that extra money to make an extra payment on your debt.
Even a small amount of extra money can make a big difference when you’re trying to pay off debt.
Paying off debt is not easy. It requires discipline and a commitment to making your payments on time each month.
If you’re having trouble staying disciplined, consider setting up automatic payments from your checking account to your debt account. This way, you’ll never have to worry about forgetting to make a payment.
Paced debt can be a great tool to help you get out of debt. Just be sure to use it wisely and you’ll be on your way to a debt-free life!