How To Find Money To Pay Down Debt

One of the greatest difficulties a growing number of people face when trying to pay off personal debt is where to find money to pay off debt. In order to repay your credit card debt, you must pay more than the minimum payment, but this can be hard to do when you find yourself having difficulty just making ends meet every month.

So how can you find money to apply to your credit card debts every month? Allow me to share several tips:

Tax return: Do you typically get a large tax refund each year? If so, perhaps you can apply part or all of the tax refund towards your debts. Additionally, you should correct your income tax withholding so that a lesser amount of taxes are being withheld from each check; you'll get a smaller income tax refund, but you will have more money to apply towards your debt payments every month. The last thing you want to do is give Uncle Sam an interest free loan when you need money to pay off debt!

Tap into your savings: No one wants to spend their savings account to pay down credit card debt, however when you have credit cards that are costing you 18% or more in interest charges on a monthly basis and your savings are only earning 4% (or less), it makes sense to use some of your savings to dispose of that horrible credit card debt.

Bonuses, raises and overtime: Anytime you receive a raise, bonus or earn overtime pay, you should use at least a portion of that money to pay towards your credit card debt. Considering that this is "extra" money that you didn't have before, you should not miss the money that you put towards your debt.

Borrow against your house: This is not an option to take lightly. Yes, you'll be able to lower the interest you are paying on your debts considerably by getting a home equity loan, but keep in mind that your home is at risk if you are unable to make the payments for any reason. Opt for this method only if you are 110% certain that you'll be able to continue to make your payments, even in the event of a job loss or other emergency.

Lower spending: Although listed last, this is probably the first step you should take to find extra money to repay debts. You ought to review your spending to determine if there are any areas that you could scale back on to generate additional cash to be applied towards your debt. Some frequent bills that can be cut back on, at least in the short term, to help pay down debt include food (both groceries and eating at restaurants), entertainment (gym memberships, magazine subscriptions, cable, internet, trips to the book store) and personal care (haircuts, clothes, housekeeping services, etc.).

These are just a few tips on ways to get money to pay off debt. There are hundreds of other ways you can find money to apply towards your credit card debt if you are inspired to find them.

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