If you want to make changes to your financial future and learn how to get out of debt the right way, then you have come to the right place!
Before you can decide that you eliminate your debt, you need to understand it. That means taking full responsibility for any balances you owe. Even if the debt was a result of situations out of your control, it is still your debt.
I have been there and understand what you are feeling. I’ve declared bankruptcy. While it wasn’t my shining moment, I take ownership of the situation. Several years after my bankruptcy, my husband and I worked together to pay off more than $37,000 in debt.
What I learned by living this was bankruptcy is NOT the answer. It did not work, but when we worked hard to pay off every penny of our debt together, it did.
If you are in the same situation I was, please don’t rush to bankruptcy. There are things you can, and must, try before you go that route. Each section below will help set you up for success in achieving your goal of becoming debt free.
One thing I know many people ask me is How can I get out of debt fast? Unfortunately, you can’t. It is going to take time, and it is going to take a lot of hard work. But, you will get your debt paid off – as long as you are dedicated and have the desire to make it happen.
HOW TO GET OUT OF DEBT – THE SEVEN-STEP PLAN
Step 1 – Understand Your Worth
The first thing you need to do is prepare your net worth and your debt pay off forms. Doing so helps you understand what you are worth and how much debt you owe. You get an overall picture of your financial health.
Step 2 – Create a Budget
Your budget must be in writing. It also must be something you can follow. Learn how to create a budget that works for you.
Step 3 – Use the Cash Envelope System
This was the secret sauce that helped us make a difference in how we handled and spent our money. Even now, long after our debt has been paid off, we still use the cash envelope system. We use it because it works.
Step 4 – Start Your Emergency Fund
Before you pay one cent towards your debt, you need to build an emergency fund. Otherwise, when the unexpected happens (and trust me, it will), you’ll have to add to your debt to handle the situation.
Step 5 – No More Credit Cards
Sorry. But you can’t use credit cards. In fact, it is best you cut them up or put them on ice.
Step 6 – Tackle Your Debt
Now is the time when you get to attack your debt! It is imperative that you complete all four steps above, or you’ll not be successful in your journey.
Using a debt calculator is an easy way to determine your monthly payment and debt payoff debt. You can use it to calculate either:
- OPTION 1 – DETERMINE THE MONTHLY PAYMENT. If you want to have your debt paid off by a specific date, enter that into the calculator below. You will find out how much you need to pay on the debt every month to get it paid off.
- OPTION 2 – FIND OUT WHEN YOU WILL BE OUT OF DEBT. Enter the amount of the payment you plan to make each month to find out when the debt will be paid off.
HOW TO PAY OFF DEBT
Once you have your forms and know the debts you need to pay, the next step is finding ways pay off your debts!
- Is it Better to Pay off Debts by Interest Rate or Balance?
- How You Can Negotiate Your Credit Card Interest Rates
- Get the Debt Collectors to Stop Calling
- Which Debt to Pay Off First
- Getting Out of Debt When You are Broke
- 10 Crucial Steps You Must Follow to Get out of Debt
THE DEBT FREE MINDSET
You can have the desire to get out of debt, but are you ready to make the commitment necessary? This means you have to change the way you think about money and spending. Forget all you’ve learned and start at the beginning. It’s time to retrain your brain.
- The Lies We Tell Ourselves About Debt
- How To Break the Cycle of Credit Card Debt
- Fact or Fiction: Not Having Debt Will Hurt My Credit Score
- The Hidden Costs of Getting Out of Debt
- Convincing Your Spouse or Partner That You Need to Get out of Debt
- Financial Advice Keeping Your Broke and In Debt
One thing you must do when learning how to get out of debt, is change more than the way you think about money. You have to change your lifestyle. I am not saying you have to change it forever. However, you will need to make some short term sacrifices to get long term gains. It will be worth it. I promise.
- Should I Stop Giving to Charity When Working on Getting out of Debt?
- Why Your Debt Free Plan Is Failing
- Common Mistake People Make When They Want to Get out of Debt
FIND MONEY TO PAY OFF YOUR DEBT
You know that you want to get out of debt, but that means you need money to do that. While getting another job may not always be an option, there are things you can try!
- The Five Categories You Must Cut From Your Budget When Paying Off Debt
- 10 Ideas to Help You Save $12,000 This Year
- 75+ Ways To Make Money (Side Hustles or Replace Your Income)
- How Our Grocery Bill Helped Us Get out of Debt
- The Top Ten Survey Sites That Pay You Cash
SHOULD I USE DEBT CONSOLIDATION?
Debt consolidation sounds great, doesn’t it? But, that does not mean it will work for you. Consider your options before you go this route to pay off your debt.
- Using Balance Transfer Cards to Pay Off Your Debt
- How Debt Consolidation Pushed Me Into Bankruptcy
- Negotiating Your Debt with Debt Collectors
ADDITIONAL RESOURCES TO HELP YOU GET OUT OF DEBT
I’ve shared my strategies and ideas to help you pay off your debt. If you need even more help, these resources might be the right answer for you.
- Apps to Help You Budget and Get out of Debt
- Dave Ramsey Total Money Makeover
- Financial Reboot Money Course