3 Steps to Getting Out of Debt
Facts are in, and there are a lot of people in debt. Myself included. Over the years I’ve managed to pay off over 80,000 in debt. Now first i payed of 30,000. Then I bought a home, then we bought a car, had a kid, sold the home to pay off the car, and yea. Some how we made good money but instead of saving it we’re always paying it off.
Here are some tricks i learned to getting out of debt.
1: Acknowledge and Accept- Total it up. All of it. Figure out exactly how much debt you’re in. Break it into three categories, total debt, monthly min payment, and interest rate. Now accept the truth, face it and do something about it.
2: Free up Cash- Pay off the debt that you can pay off the quickest. If there are two pretty close, and one will free up a 300 dolor payment vrs a 80 dollar payment. By all means free up that 300 dollars in the same amount of time and start putting it towards the 80 dolor one, or whichever is quickest. At times the highest intrest makes the most sense, but when it’s the diffrence between 300, and 80, or 10 years to pay off, and 12 months. Free up some cash fast by paying of the one you can pay off fast.
(There are times when you pay off a loan but can’t seep to be diciplined enough to put it towards the next debt. I simply took out a quick cash loan and put it directly towards the next debt. That didn’t give me more debt, it just gave me an extra payment on the next debt, making me stick to my budget.)
3:Build an Emergency Fund- I didn’t have any free cash to build a fund with so after i paid off my first debt instead of imediatly snowballing it to the next debt (doubling up the next debt) i saved up 1000 in savings. This was for emergencys only. Like, car acident, ER, hospital. That way i could easily stick to my plan, and not get into more debt while digging out.
(at times a quick loan makes more sense, during a one time emergency if your a month away from paying off another debt, and that monthly payment.)
Other than willpower over spending and sticking to a realistic budget, these tips shoule help you get out of debt quickly, and in a realisitc time frame.
