Going Debt Free in 2020

by | Dec 2, 2019 | Finances

Going Debt Free in 2020: 4 Tips for the New Year 

Debt is one of those things that seems to sneak up on us. Without realizing it, we can rack up consumer debt quickly or maybe we’re just paying too much for the things we do every day. It’s also something you can recover from, but that process takes some work. If you want to go debt free in 2020, maybe with the intention of buying your next California home, here are some tips for the new year.

Review Your Current Finances

You can’t know where you’re going if you don’t know where you’ve been. That’s the case with your financial decisions as well. Before you can make a plan to get out of debt, you need to know where all of your money is going currently.

Look at all of your current expenses. What are the fixed expenses such as rent, bills, and utilities? Then look at your variable expenses like entertainment. How do all of your credit cards look right now? What is the interest rate? Write all this down or put it in a spreadsheet.

Make a Budget Plan

Next, make your budget plan. Some experts encourage what’s called Zero Balance Budgeting and there are several apps that can help you achieve this. Here, you’ll create categories for all of your regular expenses, both fixed and variable. When you’re paid, you’ll assign money to every category so every dollar has a job.

This way, when you pay your bills you know that you have enough money. You also know what your entertainment budget is and if an activity will make you go over, you’ll need to pull the money from another category. If that won’t work for you, you’ll know that you don’t have the money to spend.

Investigate Your Credit

Aside from student loan debt, one of the biggest challenges for many adults is consumer debt. Credit cards can get racked up so easily without even realizing it. And when something has a high interest rate, even paying the minimum balance won’t come close to paying them off.

Instead, take a look at what you have. Start with the credit card with the highest interest rate and send as much money as you can afford every month. Continuing paying the minimum or just over the minimum on the rest of your cards. Once the high-interest card is paid, move on to paying more for the next one and so on. You will see the progress start to add up.

Start Now

The thing with debt is, whatever you put off today actually compounds tomorrow. Waiting to start will never get you out of that financial hole or in a position where you can buy your new California home. Start now, today.

One great place to start is to talk with Zachery Adam of GoPrime in California to see where your finances stand today in terms of buying a home. From there, you can make large and small decisions to get out of debt and move forward.

Contact the team at GoPrime Mortgage of California to learn more about buying your next home in the Bay Area. Contact Zachery Adam and the team at GoPrime 

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