Money

How to Keep Your Debt From Spiraling

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iStock_000065139017_MediumDebt. It’s not pretty, but lots of people have to deal with it and, while it’s easy to accumulate, it’s very hard to pay off.  You may not like to talk about your debt, but ignoring it just allows it to spiral out of control.

[Related: Should You Ever Borrow From Your 401(k)?]

The average American household has $15,672 worth of credit card debt, $27,141 in auto loans and $48,172 in student loans, according to NerdWallet, and those balances cost a lot more when interest charges start adding up over time. Want to keep your debt from reaching those numbers? Use these tips to help keep your debt from spiraling out of control:

Stop Charging

The simplest way to stop a debt spiral is to stop using credit. Put the credit cards down and go to a total cash system. This will keep you from adding additional debt to your financial picture, and once the cash is gone you won’t be able to spend anymore.

Cut Expenses or Increase Income…like now

If you want to become debt-free you need to start making larger payments; making only the minimum monthly payment isn’t going to cut your debt, in fact the finance charges will continue to slightly increase your balance month after month.

If you want to make larger payments you will need to find the money somewhere to make them. Cutting expenses or increasing income are your two options. Try getting a second job, taking on a roommate, or selling your car to access additional cash.

Don’t Wait Until the Due Date

Waiting until the payment due date is a big mistake if your debt is spiraling. There’s always a chance you’ll forget and make a late payment, which isn’t good for your debt or for your credit score.

Avoid the possibility by setting up automatic payments so you’ll never risk a late payment. Then commit to making additional payments above and beyond the minimum payment to reduce the balance and save on interest charges.

Skip the Bad Habits

The cost of dinners out at restaurants, alcoholic drinks with friends, and cigarettes can all quickly add up. Whatever your vice is, whether it’s binge shopping online, eating out daily or taking luxury vacations, ignite your willpower to make paying off your debt a priority.

Small additional payments will snowball over time and your balances will start to go down. Making extra payments may also encourage you to cut even more spending to pay off your debt faster.

Be Realistic

There’s no point in paying down your debt if you’re just going to run that debt back up.  Figure out how you ended up in debt. Is it because you were living beyond your means? While it’s important to not totally deprive your lifestyle, it’s also important to be aware of your spending triggers and avoid them.

Start with small lifestyle changes to keep your debt balances under control. Is your debt currently spiraling? Which of these tips can you use to stop it?