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Climbing your way out of debt can feel like a never ending battle especially when you’re working with a limited budget.  According to ValuePenguin, the average U.S. household has $5,700 of credit card debt.  Rather than wave the white flag and give up, we have some solutions to help you eliminate your debt.

Create a budget and stick to it

For many people, creating a budget is an eye-opening experience.  While you may think you don’t have enough money, chances are you’re just not spending it wisely.  Calculate how much money you bring in versus how much you spend and look for areas where you can cut your expenses.  Any money you’re able to free up needs to go towards paying your debt.  If creating a budget isn’t your forte, our “Simple steps for creating the perfect budget” can definitely help get you on the right track.

Change your spending habits

Sometimes, it’s not the monthly bills that gets us into trouble, it’s the unnecessary spending.  Credit cards are convenient but they make it too easy to spend carelessly.  To get your spending under control, put away your credit cards and switch to a cash only diet.  By using cash to make day to day purchases, you’ll be forced to think long and hard before you buy anything. You’ll also be able to determine what you need vs. what you want. Your savings will come from cutting ‘what you want’ spending. This requires a great deal of discipline but it will be worth it once you see the savings add up.

Take advantage of balance transfers

Failing to pay your credit card bills on time is a costly mistake.  Depending on the card type, your interest rates can soar as high as 29.99%.  This is why it’s important to take advantage of credit cards that offer a 0% introductory period on balance transfers.  Since introductory periods can range between six to 18 months you’ll have ample time to pay down your debt without racking up additional interest.

Decide on a plan of attack

Two popular strategies for paying off debt are the ladder method and the snowball method.  With the ladder method, you focus on paying off the bill that has the highest interest rate while making minimum payments on the rest.  Once it’s paid off, you move on to the second highest bill and continue the process.  By knocking out the fastest growing bills first, you’ll save money on interest.  Alternatively, the snowball method uses small victories to keep you motivated.  This is done by paying off the smallest bill and working your way up to the larger ones.  Just like with the ladder method, you’ll also make minimum payments towards your other bills during the process.

Put any “free money” towards debt repayment

You know that tax refund you look forward to every Spring?  Well, kiss it goodbye.  Any “free money” you receive throughout the year needs to go towards your debt repayment.  This includes work bonuses, birthday and holiday money.  Considering the average tax refund is around $3,000, applying the extra funds will significantly reduce your debt.  Remember, you’ll get the biggest possible refund when you do your taxes at ezTaxReturn.com.