After many years of being in debt Rachel Kramer Bussel realized that if she doesn’t take action, […]

After many years of being in debt Rachel Kramer Bussel realized that if she doesn’t take action, she will end up in debt forever.

She says, “Starting to see the money go in the right directions helped me increase it.” Bussel’s debt, which included student loans, credit cards and back taxes, was over $100,000 at one time. She finally paid it off in 2020.

As the new year begins, many people set out to pay off their debt. In January, bills for holiday shopping or other end-of the year spending are due. This year, debt is becoming more expensive as rising interest rates force higher payments. The Federal Reserve reports that revolving debt (which includes credit card balances) continued to increase throughout 2022. It increased at 10.4% per year as of October, according to the most recent figures.

These strategies can help you tackle your debt in the month of September:

First, look back. Then go forward

Elaine Grogan Luttrull is a financial counselor and financial educator in Dublin, Ohio. Before making a payment plan, it’s important to consider how the debt came about. “Was there pressure? Excitement? Habits? She suggests that you examine the triggers that led to this debt and then take a moment to feel it.”

She adds, “Let’s be positive and not berate ourselves. Let’s be solution-focused.” She says that skipping this introspective step can make a difficult task of taking action. It’s easy to dwell on past choices and feel bad.

Get organized

Luttrull states that listing all your debt along with their interest rates can help you organize and determine which debts to pay first. Luttrull suggests that you start with the highest interest rate debt, also known as the “debt avalanche” method. However, others prefer the “debt snowball” method where you start with the least debts first.

Next, find money in your budget that can be used to pay down debt. Luttrull suggests that student loan payments could be paused to allow you to use the money to pay off credit card debt. It is also possible to find lower-cost ways of socializing with friends such as hosting game nights and going on a hike.

Emma Johnson, founder of the website wealthysinglemommy.com, suggests combing through all of your banking and credit card statements to identify recurring costs you can immediately cut. Popular targets include streaming services, gym memberships, and cable bills. She suggests that you do a’spring cleaning’ in the new year. What can you do to adjust?

Earn extra money

In an era of inflation and tight budgets, earning more money may be the best way to find the cash you need to pay down debt. Cedric Nah, founder of the non-profit Black Wealth Summit and author of “Why Should White Guys have All the Wealth?” says that there are many options in today’s tech-oriented world. “There are loads you can do right from your living room. You could become a computer technician if you have the technical skills or tutors if you are good at math. Take a look at your skills and use them to reduce your debt or to increase your wealth span>

Nash is based in St. Petersburg Florida. He says that his friends make side incomes by deejaying and hanging Christmas lights.

Consider consolidating your debt

You may be able to qualify for a credit line with a 0% annual percentage rate. This will allow you to transfer your existing credit card debt onto the card. It will also give you more time to pay it off, without incurring additional interest. Matt Elliott is a certified financial planner who founded Pulse Financial Planning in Rochester. Consider applying for a personal loan that has a lower interest rate than your credit cards.

“If your credit is good, you might be able to lower the interest cost by transferring the balance to either a 0% personal loan or credit card with a lower rate of interest.” he said.

Create new traditions and get rewards

Nash states that it is essential to reward yourself for achieving milestones such as paying off your credit card. Nash says that no one enjoys paying their bills, so we need a rewards program. This could be a trip or a long-awaited purchase as long as it doesn’t increase your debt.

Johnson recommends that you start new traditions to keep debt under control. Johnson suggests writing custom love poems for your children instead of Valentine’s Day gifts. It’s meaningful and they want it now. It’s also free .”

This article was written and published originally by The Associated Press by NerdWallet.