In this 2 Minute Q&A Tuesday, we’re going over how to pay off credit card debt during this Pandemic. This couple has a 3-year-old child, while one person is still employed and the other is on unemployment. Their goal at the moment is to pay off their credit card debt. But with everything going on this goal of debt-freedom can get a little tricky.
Emergency Fund before Debt
When creating a game plan to pay off your debt during this pandemic, make sure you’re prioritizing your family first. The best way to do this is to make sure you have an emergency fund. If you’ve used some of your emergency funds then just make sure you use your extra money to replenish it. As this pandemic continues and so many are faced with relying on unemployment to make ends meet. Having a fully-funded emergency fund is the best way to take care of your family no matter what life throws your way.
Another reason you want to prioritize your emergency fund over paying off debt is that we don’t know when this pandemic will end. At first, the shut down was only supposed to last a few weeks, then it turned into months. Well look at us now, we don’t know when things will get back to normal. We have to get pro-active and make sure we have cash reserves. This will allow us to feel more financially confident during this pandemic.
Snowball your Debt
Once you have a fully-funded emergency fund, I would then consider paying extra on your debt. Paying off your credit card debt from smallest to the largest amount due. This will allow you to owe fewer people on your journey. Which can be very motivating and give you some peace of mind when contacting learners. Now what you also want to do is call all of your credit card creditors and see if you can postpone or negotiate your debt balance, interest, and minimum payments. This is a big help to families that are currently on unemployment or not making enough to make ends meet. But to do this you have to contact your creditors.
As a mom that’s at home with my 2-year-old and a 4-year-old. I know how hard it is to keep your sanity during this pandemic. The best thing you want to do is get organized and purposeful with your spending and your income. I am keeping a close eye on expenses that could deter me from staying out of debt. Instead, stay focused on your family, saving money, and budget. These are the financial fundamentals that help you get through this pandemic with poise.
- Emergency Fund: What is it and How much do I need?
- How to Stretch your Dollars with Purpose during Uncertain Times
- Should You Save or Pay Off Debt?