8 Steps To Get Out Of Debt Fast
Debt is the heaviest burden to carry and it is the most insidious to acquire, Getting rid of your debt is the most important thing anyone can do in any situation.
To achieve this objective you MUST be disciplined. Without a plan and the discipline to keep at it you will fail, there is no doubt. Debt is the easiest to get into and the hardest to get out of. You will be bombarded with messages to borrow money and get this product that you absolutely cannot do without. The message will be coached in the brightest terms giving you the impression that there will be no problem paying it off.
The steps to follow when you are in debt are as follows:
- Make a budget so that you have a plan to use your income sensibly.
- Prioritise your debts by putting those with the highest interest rate at the top NOT the one that is the biggest.
- Set aside money to pay your basic living expenses e.g. utilities, property tax, energy and income taxes.
- Inform all your creditors of what you intend to do. Creditors in general are not ogres; they are human (even if they sometimes appear not to be). As long as they are aware that they will get something, hopefully the minimum payment, then they will go along with your plan.
- Pay the largest possible amount of the debt with the highest interest rate; by paying the highest rate first you deal with the debt that grows the fastest if left alone.
- Once you have dealt with the largest interest and paid it off then do the same with the next largest.
- DO NOT BORROW. You are trying to get rid of debt; you cannot do this by borrowing. The idea may seem good that you can borrow cheaper than the debt you are paying off, not true because you are probably paying over a longer period.
- Go without anything that is not a necessity, you can have your luxuries when you have not debt.
By following these steps you will get out of debt and you will be surprised how easy it becomes once you get out of the spending habit. Waiting until you have the cash to buy something becomes a virtue and you will strive even harder to keep to your budget. I know this works because 10 years ago I was in the situation of owing over $10000 but I paid it off in 18 months and have never owed a penny since, and I don't own a credit card so I am not tempted to spend what I don't have.
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