A goal that many of us have is to get out of debt once and for all. It seems like it's impossible at times, but it can be done.
There are steps you need to follow and decisions that need to be made. However, you can create a get out of debt plan that works for you.
Identify Your Debt
You know you have debt, but if you haven't created a play to pay it off yet, you may not know quite how much debt you have accumulated. Write down each and every debt that you owe - from credit cards, to car notes, to student loans, to cell phones that you are paying for monthly.
Once you have your list, add up all the debt to find out what your total is. You might end up being surprised with how much you owe!
Track Your Expenses
The first thing you need to do is learn where your money is going each month.
Track your expenses for at least one month and write down every penny you spend. This can be an eye opening experience. While eating breakfast out each morning may not seem that expensive, doing so for a month can be more costly than you realize.
Create a Budget
Once you've tracked your expenses, you need to create a budget.
The key with a budget is that you need money left over after expenses to put towards debt. If your budget is really tight, you may have to cut some of your expenses so that you can put as much money as you can towards paying off debt.
You also need to have at least some money set aside in savings to help prevent the need to use credit cards for the unexpected emergencies that pop up (and there will be some!).
Sell Items to Pay Off Debt
If you have a large amount of items, even low cost items, the total can add up quickly. Use the profits to pay off as much debt as possible.
Get Your Interest Rates Lowered
If you have good credit and have paid your bills on time each month, contact your creditors. You want to get your interest rates lowered as much as possible.
If you're not getting anywhere with the first person you speak to, ask to speak to a manager. Don't give up until you've lowered your interest rate to a more reasonable amount.
Choose a Strategy to Pay Off the Debt
Last, but not least, when it comes to tackling your debt, you need to choose the method that works best for you.
Some people find that paying off the smallest debt first works best while others focus on the debt with the highest interest rate. Research your options carefully and make a decision.
With either method, you pay the minimum payments on all debts and then attack the first debt on your list (whether it be the smallest or one with the highest interest rate). When that debt is paid off, then use that debt's payment towards the next debt and so on.
Getting out of debt isn't impossible, but you need to be organized and diligent. Take the time to follow these steps so that you can conquer debt once and for all.