Paying off your debt is one of the most difficult — and important — pieces of achieving financial freedom.
Until you are completely debt-free, someone else is going to own something that you think is yours.
The number one way to pay off your debt is to automate your payments. Set it, forget it and you’ll be well on your way to being debt-free.
If that’s not an option, you’re setting yourself up for additional problems, including late payments.
If you’re running late making your payments, here’s how to catch up.
List Out All Of Your Payments
The first thing you need to do to avoid late payments is to know when every bill is due.
List everything out. Put it on a calendar. Know exactly how much the payment is and when it’s due.
Don’t let your ignorance of when a payment is due be the reason you get hit with a late fee. (You don’t want a late fee for any reason — especially not because you just didn’t know when it was due.)
When I have non-automated payments, I always immediately add a calendar notification to my Google Calendar for two days before the due date; that way, it bugs me (on my computer and phone) when it’s due, and I have a cushion of a couple days in case there’s some extenuating circumstance (money needs to be transferred, the e-payment system is down, etc.).
Know what you owe, and when you owe it.
Re-Work Your Spending Habits
If you’re finding that you’re ready to pay your bills, but don’t have enough money in your bank account to pay for them, you need to adjust how you spend your money.
There could be some obvious changes; move money into your emergency fund at the end of the month instead of the beginning, or hold off on buying your regular expenses until after you make your payments.
There may need to be some more difficult (but impactful) changes, like cutting back on your expenses, trying to increase your income as much as possible or changing your lifestyle. None of these is necessarily easy — they could, however, make a huge difference in your ability to stay current on your payments.
Consolidate Your Debts
Managing multiple debt payments can be overwhelming — even more so if you can’t make them all on time.
It may make sense for you to consolidate your debts into one or two accounts, where you can have the advantages of installments with only one payment to worry about. Usually, when you consolidate, you can get an initial discount on your interest rate, and hopefully by consolidating, you can lower the interest rates on some of your debts.
Talk to your credit union or a debt consolidation service to see what options are available for you.
