By Jessica Zackavec
Millennials are known as the generational group that is most in debt. How can we change this? I’ve come up with a few practical ways to pay off debt and prevent future debt.
- Make a budget. What is your current monthly income? How much debt and savings do you have? Do you have any extra money that can be applied to your current debt? Are there expenses you will need to cut? Are you going to have to be a bit more creative with your money? You won’t know the answers to these questions—and won’t be able to make a plan to reduce your debt—until you know what your income and expenses really are
- Be creative. Do you need a bit of extra income? Can you pick up a part time job, or even a babysitting job one night a week? Designate all money from your “extra job” to go towards your debt. Another option, if you already have a jam-packed schedule, is to look at your current spending and decide if you can get rid of any current spending categories. Do you have a gym membership you aren’t currently using? Would you be better off canceling it and going for a run or working out at home? Making a few sacrifices like not eating out or getting rid of a membership will give you additional money to apply towards your current debt. I promise it will be worth it in the end!
- Always make your payments. A late or skipped payment is not worth it because of the damage it can do to your credit report. Choose to make at least the minimum payment even when money may be a little tight.
- Use the snowball approach.
I personally love the snowball approach. Pay the minimum payments on all of your debts, and pay extra on your smallest debt. Once that smaller debt is paid off, you feel a sense of victory. Now take the extra amount you were paying monthly plus the extra from the debt you’ve eliminated and apply it to your next smallest debt. Continue to do this with each debt ‘til they are all paid off. I love this approach because you can focus on smaller goals that are attainable instead of looking at the total amount of debt and feeling overwhelmed.
- Don’t Buy what you don’t NEED! To stay out of debt this step is especially important. Consumerism is a big problem for many people today. The desire to keep up with the Joneses or to reward yourself after a tough day with a new purchase or a night out is the norm. You need to remember that debt is also a norm in current society. If you want to be different and debt free, you need to live differently now! I encourage you to save up for the things you really want, and don’t get in debt over what seems urgent in the moment, but won’t be important tomorrow. Understand the difference between needs and necessities. Most importantly, stop using credit to make purchases if you tend to overspend.
I hope this helps you on your journey to overcome debt. I know it can be overwhelming, but you can do it! Don’t let yourself get discouraged. Come up with a plan of attack and stick to it! Making steps towards a debt-free life will feel great and in the long term it will help you live a much fuller life.
About the Author
Jessica Zackavec is a newlywed and the wife of a volunteer firefighter. She has a passion for stewardship, and enjoys budgeting. She also loves crafting and all things Pinterest, and if there is an opportunity to make something amazing for cheaper, she will find a way! Creativity is a big part of her life at work and home. She is the Church Relations Coordinator at Barnabas Foundation and works in Stewardship Education, as well as Marketing.
This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.
And join us for a Live Chat with Darryl Dahlheimer, Program Director for LSS Financial Counseling, for Conquering Your Debt: the Overlooked Key to Faith and Finances on Wednesday, September 28, 8 p.m. Eastern, 7 p.m. Central, 6 p.m. Mountain, 5 p.m. Pacific. Debt stress is the #1 identified financial problem for many families, but few know about the special resources to help get debt-free faster. Debt repayment is one area where “do it yourself” can lead down a dead end; trustworthy help is available. This Live Chat will share specific resources for each type of debt, including Debt Management Plans (DMPs) for credit card debt, available at nonprofit certified agencies, and income-based repayment and forgiveness options for student loan debt. Get free of debt faster, while building a good credit score, and avoiding heavily advertised “help scams” such as debt settlement and refinance schemes. It’s free! Register today at stewardshipresources.org/compass-live-chats. People of all ages are welcome!
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