When you have an established budget and manage to spend less than you earn, there is a method of debt reduction you can try using to work towards living a debt free life. By making multiple payments in a single month on your accounts, you can avoid compiling interest rates and missed payments.

Where to Start

Starting out, you want to make sure you have a clear understanding of who you owe and how much you owe to each of your creditors. Match that list up with your budget and see on which accounts you can afford to make an extra payment. It may just be one account to start with but as you continue to reduce your debts, you will be able to add more money to other accounts soon enough. This method allows you to focus on more than one debt at a time, unlike the snowball method – however, eventually your increased amount of payments will take on a snowball effect quality. Since you are including the extra payments in your budget, you do not need to worry about being able to afford it each month.

Reworking the Numbers
When you add the extra payments to one account continue to do so until the debt is paid off and then rework your budget to attack other accounts. You will need to prioritize your bills to keep up with which accounts you need to pay off next using the multiple payment methods. Make multiple payments on certain accounts only when you can afford to keep current with all of your other financial obligations each month.

See The Big Picture
Multiple payments can help you to focus on a bigger picture and enable your budget to work for you and your future debt free life. Make sure you consider the interest rates on various accounts and differentiate between your secured and unsecured debts when deciding which accounts to make multiple payments towards each month.

Whether you chose to use a professional service or undertake the debt reduction process on your own, remember that no one system will work the same for each individual. If you work through your budget and discover that the multiple payment method will not work with your finances but it worked great for   a friend or relative, don’t be discouraged. There are a multitude of ways you can try to work down your debts using a system within your budget. Choosing the right method is just as much an important part of the process of recovering from debt as making on-time payments.