There are lots of
options out there for those of us who are
too far in debt. There is credit counseling
and debt consolidation. There are lawyers
offering to have your debt reduced for a
fee, and in extreme cases, there is
bankruptcy. With all of these choices, one
might imagine that it's impossible for a
person to get out of debt on his own.
The truth is that it is quite possible to
get out of debt with no outside help. Even
those who don't think there is room in their
budget to pay down their debts are often
surprised. It takes willpower and
determination, but you can usually get out
of debt on your own.
How do I get out of debt on my own?
Are you too far in debt? If so, in order to
get out of debt on your own you will need to
develop a plan and stick to it. Here is a
good plan to follow:
1. Stop accruing new debt. Put the credit
cards away, and refrain from taking out new
loans or refinancing old ones to borrow more
money.
2. Create a budget. You need to know where
your money is going each month, and in which
areas you can cut back to free up more money
to pay off your debts. If you're not sure
where your money is going, write down all of
your expenses for a month and then make your
budget.
3. Cut the unnecessary items out of your
budget, and cut back anywhere else you can.
Set this money aside to pay down your debts.
4. Determine which debt needs to be paid off
first. If you have secured debts other than
a long-term mortgage, you may want to pay
them off first. Debts with high interest
should also take priority, unless you have
lower interest credit cards that charge
exorbitant annual or monthly fees.
5. Pay the minimum payment each month on all
of your debts except the one that you have
given top priority. Put all of your extra
funds toward that debt, and continue to do
so until it is paid off. If you get a bonus
at work or unexpected money from some other
source, consider putting it toward your debt
as well.
6. When you get one debt paid off, start
putting your extra money toward the next
one. Repeat until all of your debts are paid
in full.
Paying off debt on your own is often easier
than you think. By taking a realistic look
at our finances, we can often find ways to
come up with the money to pay debts off
without the help of anyone else. Doing so
helps us maintain good credit, or rebuild
our credit if it is imperfect. Recommended Reading
Debt Free
In Three
Thanks to this guide complete with
worksheet and personal coaching, my family
and I will be complete debt free in 42
months (including paying our house mortgage
in full). The principles taught in this
program are simple, yet incredibly powerful.
See for yourself.
Click here to get Debt Free in 3 to 5 years. |
