A $500 debt may not seem like much when compared to the average mortgage or student loan debt, but it can be just as burdensome, especially if that $500 has a high interest rate and could bloom to $1,000 or more if left unattended. Depending on how much extra income you have each month, you could quickly pay down $500 within a few months. If your income just barely covers your monthly expenses, you may have to cut back on your spending, at least until the debt is covered.
Total your monthly income and expenses. Compare your expenses to your after-tax income. If your expenses are more than your income, or close enough to the amount of your income that you don't have any wiggle room for paying your $500 debt, you'll have to make a few cuts.
Set a time frame for paying the $500. Use a debt calculator to determine how much you will have to pay each month to pay the debt off within a set amount of time, such as 6 months or one year, based on the interest on the debt. You can also set a monthly payment and see how long it will take you to pay off the debt. For instance, if you pay $50 a month on a debt with 15 percent interest, it will take you 11 months to pay off the debt.
Develop a way to come up with the extra money to pay down your debt each month. For instance, if you plan on paying $50 towards the debt monthly, you could cut out one meal out or a week's worth of takeout lunches to meet your goal. If you are already living on a shoestring and don't have any frivolous expenses to cut, come up with a way to earn $50 extra each month. You may need to get a part time job, ask for a raise, or pick up an odd job here and there.
- Thanks to the Credit Card Act of 2010, your card statement will tell you how long it will take to pay off your debt if you make only the minimum payment, and how much you need to pay monthly to pay down the debt within three years.