You sit down at your kitchen table with all your bank statements and credit card documents spread out in front of you. It’s clear you need a plan to tackle this debt, and you need it now. But maybe you don’t have the funds — or the time — to sit across the desk from a financial advisor. Or perhaps you want to make some progress on your own before scheduling that meeting.
Americans now carry $17.9 trillion in debt — take these steps to dig out if you’re part of that number.
Most people never consider these 4 financial moves — and they’re leaving thousands on the table.
Of course, you could spend hours on Google or scrolling through social media to see how other people handle debt repayment, but those methods might not speak to your unique needs. Fortunately, there’s a way to get started without much hassle. Just grab your phone and open ChatGPT.
Using a series of strategic prompts, you can develop your own personalized debt repayment plan. It’s easier than you think (though keep in mind: you should never input exact financial account details into ChatGPT for privacy and security reasons).
Climbing out of your hole of debt starts with knowing exactly how deep it goes. Instead of manually adding up balances or calculating interest, try using a straightforward prompt like: “What is my total debt if I owe $X on one credit card, $Y on another card, and $Z on a third card?”
If you want to understand the dramatic impact interest has on repayment over time, ask ChatGPT: “How much interest will I pay in total if I owe $X at X% APR, $Y at Y% APR, and $Z at Z% APR, assuming I only make minimum payments?”
The answer might just motivate you to avoid carrying a credit card balance ever again.
Once you have a clear picture of your debt, you can ask ChatGPT to give you a more comprehensive plan for how to pay it down. Try a prompt like: “Create a debt repayment plan for someone with the following debts: $X at X% interest, $Y at Y% interest, and $Z at Z% interest. Include monthly payment amounts, due dates, and recommendations for prioritizing payments.”
With this prompt, you’ll have enough info to create a spreadsheet listing your due dates and payment amounts to keep everything organized. You can even ask ChatGPT to create a table for you that you can copy and paste into Excel or Google Sheets for easy tracking.
The snowball method is one of the most popular approaches to debt repayment. With this strategy, you prioritize paying off the smallest debt first while paying only the minimum amount you owe on the others. Once the smallest debt is paid off, you roll its payment into the next smallest debt, essentially creating a snowball effect.
ChatGPT can outline a personalized snowball strategy with a clear prompt: “Design a debt repayment strategy using the debt snowball method for someone with the following debts: [list debts with amounts, interest rates, and minimum payments]. Prioritize paying off the smallest debt first while making minimum payments on others.”
The avalanche method takes the opposite approach. Here, you tackle your debts with the highest interest rates first to minimize the total amount of interest paid over time. Regardless of which approach resonates with you, ChatGPT can help you come up with a payment plan.
You could use a prompt like: “Create a debt repayment plan using the debt avalanche method for a person with [list debts with amounts, interest rates, and minimum payments]. Focus on paying off the debt with the highest interest rate first.”
Creating a plan to repay your debt is one thing, but having the cash flow to stick to it is another. That’s why creating a budget is essential. ChatGPT can help you develop a realistic budget to free up funds for debt repayment. Try a prompt like: “Create a debt repayment plan for someone with $X of credit card and loan debt. Include budgeting advice to help them reduce expenses and save more for debt repayment each month. Incorporate emergency savings into the plan.”
With this question, ChatGPT can suggest areas in your budget where you could cut costs or offer tips for allocating your money more effectively.
If you get a raise or take on a side hustle while you’re working on paying down your debt, you might be tempted to throw all that extra cash at your balances. However, you’ll see better results if you create a strategic plan for how to allocate that money. ChatGPT can help guide you.
Use a prompt like: “Create a debt repayment strategy for someone with $X debt who now has an additional income stream of $Y per month. How should they allocate this new income towards paying off their debts? What should they prioritize first?”
Have you seen these 4 TikTok-viral money hacks? (They can save you thousands.)
Using ChatGPT to kickstart your debt repayment strategy is a practical and empowering way to take control of your finances. That said, it’s important to understand that while AI can provide helpful guidance, your unique financial situation could still benefit from consulting a financial advisor later on. In the meantime, these prompts can help you get started — and stay motivated — as you move toward your debt-free future.
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This article originally appeared on GOBankingRates.com: 5 ChatGPT Prompts To Create a Personalized Debt Repayment Plan
