How To Pay Off Debt You Incurred During the Pandemic

How To Pay Off Debt You Incurred During the Pandemic

The pandemic was a stressful time. Even worse, some businesses were forced to shut down, leaving many people without a job. If you lost your employment, you may have incurred a lot of debt just to cover expenses. 

If that’s the case, don’t beat yourself up. If you didn’t have substantial funds in savings, going into debt was probably your only option. Fortunately, there are ways to pay that debt off.

Consolidate Your Debts

Priority Plus Financial and similar companies loan individuals enough money to pay off all of their credit card debts. These companies can often loan you money at a lower interest rate than what credit card companies charge. Plus, you have one monthly payment instead of several. 

If You Haven’t Already, Create a Budget

List your income sources and then list every one of your debts. Subtract your expenses from your income. If you’re spending more than you make, you need to take a careful look at what you spend money on each month.

There are always ways you can spend less money. You can cook at home instead of eating out or buy a half-gallon of flavored coffee instead of buying it from a coffee shop. Cut back on your costs until you have more income than expenses. Then use that surplus to make extra payments on your debt.

Use the Snowball Method To Get Out of Debt

Take the surplus from your budget and make extra payments each month on the smallest debt you have. Once you pay that debt off, start making extra payments on the next smallest debt until you pay that one off as well. Continue in this manner until you have paid off all of your debt. 

You can also switch things around, and pay off the debt with the highest interest rate first. Then move on to the second highest and so on until you’ve eliminated all of your debt.

Negotiate With Your Creditors

You can also contact your creditors and see if you can negotiate lower rates with them. Under the CARES Act, you might be able to get a reduction in interest rates as well as payment extensions or reduced payments. 

The important thing is to not give up. Don’t think of yourself as a failure simply because you got into debt. It may take time, but you can be debt-free. Chip away at your bills slowly, and they’ll disappear one by one.