Making Cents Blog

Using baseball fundamentals to beat debt

Ways to reduce your debtWhat could baseball teach us about paying off debt? Read these tips and you’ll find out:

1. Don’t let debt continue to win. A baseball fundamental for winning is to not let your opponent score a lot of runs. As in life, the first step to beating debt is to stop adding to it. Try limiting your spending and consider consolidating debt with a home equity loan or one low-rate credit card.
2. Have a game plan. Every manager has a plan on how to succeed in any situation. So why shouldn’t you? Sit down with all of your credit card and loan statements. Write down each of the balances and interest rates. Then, tackle the loan with the highest interest rate first. Add any extra money you can to this payment. Once the first loan is paid off, take that payment and roll it in to the next highest interest rate loan.
3. Avoid making costly errors. In baseball, an error could cost a team the game, just like a late payment could cost you your credit score. Making all of your payments on time will help your score. After a few months of on-time payments, try calling your financial institutions to see if you qualify for an interest-rate reduction.
4. Hold on to the lead. Once you say goodbye to high interest debt, make sure it never happens again. Only charge things to your credit card that you can afford to pay off every month. Defense can get a team out of a jam and in the end could save the game. Life doesn’t always go as planned, so be prepared for tough situations. Build up an emergency savings account, so you have cash on hand in case of a financial set-back.
Maybe baseball philosophy isn’t a cure-all for your debt situation, but hopefully you learned some basic principles for minimizing debt. If you would like to find out more regarding debt consolidation and reduction, please contact a Member Relationship Manager at any Alliance financial center who can assist you in reaching your personal goals.      

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