You can pay off your debt in 5 easy steps. You might be reading that thinking that it cannot possibly be true, considering how much debt you are carrying. Before you resign yourself to paying high interest rates and making minimum payments for the rest of your life you should at least give this plan a try. Getting out of debt will make you feel better for sure. You will not have to dread looking in the mail box or writing out payments each month. More importantly though, being debt free is the first step toward building real wealth.
Once you know how to pay off your debt in 5 easy steps you can then start saving and investing your extra cash. Not only will you be free of debt but you will also have freed up lots of extra money from your budget. You can then start using that money toward saving for a big investment or purchase that can put you on the road to financial freedom and wealth.
Pay Off Your Debt In 5 Easy Steps
Write a list of your debts – This is one of the hardest steps in the process because it requires you to be completely honest about the financial corner you are backed into. It is a necessary step that can even be liberating. Once you know the full extent of the problem you can set about tackling it.
Separate the debts into categories – You will need to further list your debts so that you know which ones are in default, which carry high interest rates, and which ones you are currently paid up on. This list may be dynamic, so you will continually update as you pay things off or get current with outstanding balances.
Set up a list of priorities – There are many approaches to the order in which you should pay off your debts. Some experts say to pay off the highest interest first while others say to pay off the highest balance first. You may have a personal reason for wanting to pay off a specific debt first. Whichever way you choose to do it, you must stick to it so that you can see the snowball effect of paying off debts which will serve as the impetus to continue on your debt clearing journey.
Make a plan – When you look at your debt and compare it to your income you will have to decide if you make enough money to pay off the balance in a timely manner. If there is not enough money coming in you will have to consider other options like getting a second job or doing a debt consolidation. If you do not know how to do it you might need to get debt counselling from a reputable and non profit debt counselling organisation.
Plan for the future – Now that you have fully assessed your debt you can set a date on which you want to have your debt completely cleared. While it might seem impossible to reach right now, know that you will get there. Once you do you will want to have a plan in place to deal with your extra cash. resist the urge to celebrate by spending money frivolously.
You can pay off your debt in 5 easy steps. All you have to do is come up with a plan and stick to it. Once you are clear of debt your life will be so much better because you will not be burdened with the stress that comes with being in debt. You will also be able to finally start planning for the future with the extra money you have in your budget.
This article was written by Timothy Ng. You can read more of his work at 0 balance transfer, where he has a number of comprehensive guides to all types of credit cards.