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Being a single parent isn't easy! Research shows that single mothers have to slog making both ends meet. Other than taking care of daily chores and children, paying off debt is also a significant task. Keeping in mind the wage gaps, single women sometimes fall into the lower salary slab. If you have personal debts to repay and maintain a good credit score simultaneously, you can leverage the benefits. But the high standard of living and other systems makes it slightly tough to keep a good credit score when there's a huge loan amount to repay.
Are you a single mother who wants to be debt free at the earliest? If yes, discussed below are useful steps that will help you attain that objective.
- 1. List all the expenditures you incur and debts
Keep a check of all the debts you have incurred. And then make a list of the recurring costs that you need to pay on an end-to-end basis. There can be credit card payments or student debt that makes you indebted to banks or financial institutions. You probably are making all these payments on a monthly basis at a reduced interest rate. Expenses that keep recurring are not debt. These are causes that you will have to pay for, more so as a single mother. All these aspects need to be factored well into the monthly budget.
- 2. Create your objective
It's evident that your ultimate aim is to be able to provide for your children in a debt-free manner. However, the goals need to be short-term. So, you should start by prioritizing the debts that you want to pay off. You can resort to several options here. A debt consolidation loan is an excellent choice here, where all your debts get consolidated to one amount. Here you will have only one monthly payment to make. If you want to know more on this you can, go online and browse through websites like https://www.nationaldebtrelief.com/and others to get useful information.
- 3. Paying off the loans with a high rate of interest
It's a smart call to pay off all the high-interest loans at first. If you have just about the required amount of credit, you can negotiate with the lender. When you gradually start paying the high-interest loans, you will make more capital to pay off the other kinds of loans. Rather than paying for the interest through the credit cards, you're also paying the principal amount. When you no more have to shell out the extra 30 cents for every dollar, you will add to your savings.
- 4. Set a time limit by which you will do away with all your debt
It is an essential move. However, any critical method to settle all your debt will be time-consuming. It can take months and sometimes years. But what is necessary is to have a clear objective about getting debt free, instead of having no plan at all. So, it's essential to do that long-term planning.
Take note of all your debts, get clear about your earnings and you will be able to prepare for the time by which you will clear all your debts. In the process, you might opt in for the debt consolidation loans available for single parents. Furthermore, trying the debt snowball method is also smart. Start with the lesser loan amount and gradually reach for the high-value personal and business debts. And one day you will steer clear of all the debts.
- 5. Generate a monthly budget
You have your expense and debt list! It means it's time to have your monthly budget in place. You've also added a timeline to all your debts. You need to understand the sources from where you will get the money to stick to your debt clearance timeline.
- 6. Analyze your overall earnings
Take note of your monthly income. Also check the amount that remains with you, after payment of your monthly bills. Are you in a place to reduce the fees? For instance, if you use high-quality disposable diapers for your baby, can you get the same quality at a lesser price from another brand? It helps you assess your income and add to your savings. That, in turn, helps in quick debt clearance.
- 7. Create a Payment Calendar
You now know the funds left with you for paying the debts after your monthly expenses. Do you have the bills due at one go? And does the paycheck arrive twice on a monthly basis? If yes, then request your lenders to later the date. If you don't want your paycheck to go in one day, you will come across several lenders and financial companies that are there to help you.
- 8. Generate automatic payments
After you create a payment calendar, making electronic payments becomes easy. It will always help you pay the bare minimum of the monthly debts. And this helps to steer clear from the late charges. When the debt amount gets automatically deducted from your account, you know that you're gradually paying off all your debts. So this means you don't have to worry each month, whether you've settled the debt amount or not. The automatic payments keep happening and make you debt-free one day.
- 9. Obtain a free credit report
Always keep in mind the advantages of a high credit score? You get the desired interest rate. You might not have a high credit score now. But it's crucial that you're aware of your credit score. Also, learn the ways to read your credit report. As you keep paying off the debts, you will find that the credit score improves.
Should you chance upon any errors in the credit report, you need to voice that as well. It will help you enhance the credit score. You can save money by getting good interest rates.
The DIY approach doesn't work when you are trying to manage personal debts, credit card debts and the like! You need to reach out to an ace service provider so that you can have a customized debt clearance plan. Every single mother has a different life scenario. A service provider plans accordingly. So don't fret if you still have a huge list of debt to clear off. Today, there are various options available for single mothers. You can start by referring to these above-discussed tactics and walk towards becoming debt-free.