New Year’s Resolutions and Money: How To Crush Debt In 2019

In a nation where differing opinions seem to be more prevalent than ever, there’s one thing virtually every American has in common: debt. As of 2017, mortgages still top the list of debt sources for US households, followed by student loans, car loans, and credit cards. Debt accumulation also coincides with income and spending growth, peaking between the ages of 45 and 54. According to Experian's latest State of Credit report, the average American household that carries credit card debt owes over $16,000!

If you’re nodding your head in agreement, knowing you need a no-frills plan to crush debt in 2019, read on for five debt destroying strategies.  

Focus on one debt source at a time

This is a tried-and-true method for maximizing results while minimizing stress. Yes, you may have two credit cards to pay off and a student loan to eliminate, but growing anxious over all of the above won’t do you any good. 

I had student loan debt years before I ever took on other debt, but I have experienced overlapping debt accumulation. When I had student loan debt at the same time as a car loan, I focused on the car loan first, because it was the smaller of the two. I made minimum payments on my student loan, and paid above the minimum for the car loan. I had three years on my car loan after starting, but only two years later my car loan was paid off, and I could then allocate more money towards a bigger debt. 

Pay the maximum possible whenever possible

Speaking of tackling large debts, it’s best to pay the maximum possible whenever you can. This is because the longer your debt is accruing interest, the more interest you have to pay, rather than just paying towards the principal. When you’re utilizing a set amount of money on paying down a debt, it allows you to focus – keeping your emotions calm as you gradually eliminate financial burden. These small wins keep you motivated to mentally fight against an industry that only tries to get you to spend more. 

Master the basics, such as budgeting 

As elementary as it seems, setting up and sticking to a budget is one of the best defensive and offensive strategies against debt. When you know exactly where every dollar is going and have it on paper (or a spreadsheet), you’re more likely to properly spend the money you do have, instead of placing more on credit. By spending less and wisely allocating your disposable income, you can use more cash to wipe out debt even sooner.

Sell stuff you don’t need

It’s an often-forgotten trick, but going through your entire house for garage sale items can get you a few hundred dollars back for junk you don’t even use anymore. Despite it being cliché, one person’s trash truly is another person’s treasure, and you are free to set your own prices. 

According to a 2014 article, the average American household has 300,000 items in it – undoubtedly dozens of which your family can part with. Do a full sweep of your house, price those items, and get them sold. You can then directly apply your earnings towards your current debt payoff. 

For many people, debt is scary and stress-inducing – but it doesn’t have to be. By following these simple yet highly effective strategies, you place yourself on the path to conquering debt. Romans 13:8 says “let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law.” May these words be continual guidance for you and your loved ones in eliminating debt.

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Written by Financial Stewardship Volunteer Brad Johnson.

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