How Do I Get Rid of $500 of Debt?

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.

Step 1

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.

Step 2

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.

Step 3

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.

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