The New Year holiday and turning the calendar to 2019 creates a feeling of starting fresh. As you reflect on the past year, focus on your experiences – build on what worked and what didn’t – set new financial goals to give you direction to shape this year’s money habits for yourself.
Pay Down That Old Debt in the New Year
Confronting your debt and thinking about how to pay it off can be scary and overwhelming. Use the New Year to face your fears. Make a list of your debts, noting the monthly payment, current balance, and interest rate, and make a plan to start paying down the debts. Many experts recommend focusing on either debts with the highest interest rates or debts with the lowest balances to pay off. While you will likely save more money paying off debts with the highest interest rates, it may be faster to pay off the smallest balances first, and seeing this progress may help keep you motivated. Small Step: Whichever method you choose for paying down debt, start by adding a small amount to one of your current payments. For instance, if you are focusing on paying off a credit card with a minimum monthly payment of $100, add $25 to that amount to start (for a total monthly payment of $125). Once you are comfortable with that new amount, add more when you’re able and stay focused on the goal. For more information about paying off debts, visit: https://www.fdic.gov/consumers/consumer/news/cnfall17/debt.html
source: FDIC Consumer News, 12.21.2018