Martin Lewis reveals how balance transfers can help clear debt
While experts have been reminding people to set manageable goals as they are more likely to stick, it is totally possible to clear debt in just three years according to one expert Maria Nevada, just by following some simple steps.
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To get started, most experts would agree that people need to sit down and work out a budget.
This helps people to see in black and white where they are going wrong and where they need to cut back.
Britain’s most famous Money Saving Expert Martin Lewis suggests people gather statements and receipts, fill in a free budget planner and see where money can be saved.
On his website, he states: “Once you know where you're spending, you can start to alter and prioritise what you do with your money to enable you to stick within your means.”
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Clearing debt is a popular New Yer's resolution (Image: Getty)
After creating a budget and looking at where one can cut back, it’s a good idea to then speak to creditors.
This could make a huge difference to the amount a person ends up paying back.
Investment blogger Maria Nevada convinced her creditors to reduce her debt from £100,000 to £80,000 by negotiating a lower interest rate and cleared her debt in three years.
She says: “£20,000 is a huge amount of money and it really helped that we managed to reduce the debt by that much by consolidating our debts into one payment.”
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Other tips that can really help people pay back debt and stick to a plan include changing one’s mindset around money and making oneself accountable.
This could be a partner, friend, another person in debt or a debt counsellor as long as they encourage you to stick to goals when motivation wanes.
While opinion is divided when it comes to whether experts believe people should pay back the debt with the highest interest rate first or focus on smaller debts to start a snowball effect, for Martin Lewis it’s a no brainer.
He says: "If you've got lots of debts, list them with the highest APR first.
"Put all your spare cash towards getting rid of that highest interest rate and pay minimum payments on the others. Don't pay off the big one, pay off the highest interest one."
Universal Credit explainer (Image: Express)
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Other tips that can help people achieve their debt free journey in three years include:
Earn more money - look at ways to increase income. This could be a second job or renting out unused assets like a room, unused space or driveway.
Lower your interest rates - as well as coming up with a consolidation plan to pay off debt, people should consider transferring debt onto credit cards with zero percent interest to help them pay it back.
Do a direct debit detox - research from Digital TV shows that 2.5 million never use their digital TV subscription or use it less than once a month.
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Declutter and sell - people can make extra cash to put towards their debt by selling unwanted Christmas presents and other things around the home.
Turn clearing debt into an obsession - with the right mindset paying off debt can be fun and create endorphins every time a debt is paid off or a smaller goal is reached.
37-year-old Tasnime Rotherham, who spoke toExpress.co.ukearlier this year about how she cleared £40,000 of debt, sums it up nicely.
She recalls: “I’ll never forget how good it felt to ring up the credit card companies one by one after clearing the debts to close my account. It was an amazing feeling.”
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Then, continue paying down debts with the next highest interest rates to save on your overall cost. This is sometimes referred to as the “avalanche method” of paying down debt.
Is National Debt Relief legit? National Debt Relief is an accredited member of the American Association for Debt Resolution (AADR). It has been around since 2009 and has helped over 600,000 individuals reduce their debt. It also has an A+ rating from the BBB (Better Business Bureau).
The two most popular strategies are to pay off balances with the highest interest rates first or to pay off the lowest balances first. The former will save you more money over the long run, but the latter can help you keep momentum and see progress.
If you receive an unsolicited call or contact from someone offering to help you eliminate your debt, be extra cautious. There's a good chance they're a scammer.
Debt consolidation allows you to combine several high interest debts into one new loan, ideally with a lower interest rate. This new loan is then used to pay off all your debts, and you only have to make one monthly payment. Many debt consolidation lenders offer to pay your creditors directly.
Making more than your required minimum payment can help you pay off debts more quickly and save money in interest charges. Earmark unanticipated funds, such as your tax return or a bonus, for debt payments.
Updated September 5, 2019 — The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.
American Debt Relief is a reputable firm that uses a process known as debt settlement to help consumers negotiate and settle credit card debt. This company boasts excellent user reviews and can help you get started with a free debt assessment.
It's operated since 2002 and served over 1 million clients to date. The firm is a member of the American Association of Debt Resolution and the Financial Health Network and holds an IAPDA Certification. They are also accredited by the Better Business Bureau with an A+ rating.
Introduction: My name is Frankie Dare, I am a funny, beautiful, proud, fair, pleasant, cheerful, enthusiastic person who loves writing and wants to share my knowledge and understanding with you.
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