A Step By Step Guide to Help You Pay off Debt without Too Much Lifestyle Sacrifices
So many people get trapped in the web of debt, and instead of looking for ways to get themselves out of the trap they entangle themselves even further.
Here are some steps that you can follow towards a debt free life.
1) Come to terms with your current situation
Many people are in denial about the status they are in and go through great lengths in hiding their situation. To many people, figuring out how deep in debt they are is like going to the dentist. You know it’s a good idea but it is not always pleasant. Some people do not make any effort since they know they are already too deep in the hole and don’t want to or know how to deal with it. By doing a debt review overview one can reduce debts significantly.
2) Stop accumulating debt
As the saying goes “If you find yourself in a whole stop digging” If you are dedicated towards being debt free, then it’s only logical to stop borrowing. Anything you buy, pay it off the same month, no adding up on existing credit card balances and no more loans.
3) Make a list of all your debts
You might need a tissue for this; this can be very depressing. The debt may include student loans, credit cards, car loans, debt owed to individuals, mortgages
4) Breakdown each debt
Create a diagram with the name of the debt, the amount owed and the minimum monthly payment. Divide the amount owed by the minimum monthly payment to get the number of months it will take to pay off a particular debt.
5) Determine the order of paying off the debt
Look at the number of months it will take to pay off the debt and write #1 against the least, find the next lowest #2. Do this continuously until you have a number against each debt. The debt with #1 against it will be easy to pay off and you should pay it first. This way you will be encouraged after you start seeing results.
6) Find extra cash
This might be a bit traumatizing, but it helps to brainstorm some ideas.
- You can find items in your house that you don’t use or buy items from a garage sale and sell online (on eBay).
- Sell your expertise online or consult for local businesses
- Practice delayed gratification
7) Pay Only The Monthly Minimum For All Your Debt Except For Debt #1
Am sure you get all sort of advice when it comes to debt. Like if you pay just a little more on your loan or credit card, you reduce debt a little quicker. However, this won’t work, instead pay only the month minimum on all debt and put in the extra cash to paying off debt #1.
8.) Move to Debt #2
Congratulations! You are making progress. For debt #2, pay off its minimum monthly payment plus the minimum monthly payment of debt #1 and the extra cash. Repeat this religiously up to the last debt.
9) Invest
Invest the monthly amount of the final debt, and don’t be tempted in getting back into the rat trap of debt
Nice article! Debt is the problem for many peoples in the world. It is necessary to get out if it as early as possible. There are several steps given in the article to live debt free life. These steps are so beneficial and everyone suffering from debt must read it. Away from this you can also search for debt consolidation reviews. It will also help you to live debt free life. Thank you for sharing such a nice information with us.
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