How to get debt free as fast as possible
How to get debt free as fast as possible
It is very easy to get in debt and of course extremely difficult to get debt free. Now that America and the world is facing one of the toughest financial crisis since the Great Depression. In this juncture I am making a genuine plea. Get out of debt, and stay debt free. My wife and I have enjoyed the benefits of being debt free a good while now, and truly it makes a big difference when we face hard times.
But alas, the million dollars question is, “How we can we get debt free?”
Here are some of my recommendations and tips, which I am sure you will find useful.
Budget Planning.
Create a budget and stick to it. This is hard for most of us because we really don’t like to contain ourselves, nor does our society promote this concept.
Do some budget planning and be practical while you do this. Often we make a budget but then at the end of the month we see that we have overspent.
Remember, a budget is a guideline, not a fixed plan. So while you are planning your own budget do consider all of your expenses and after your practical preparation is done, do you best to stick as close to it as possible.
Prioritize Your Debt!
Prioritize your high interest debts and make sure you are paying MORE than the minimum payments. If you have multiple credit cards and loans, pay the ones with the highest interest off first.
Another good idea is to consolidate your debt. If you have good credit, you can easily obtain a loan at a bank to do this.
Lastly, make sure to at least pay the minimum payments on the debt that is not the priority.
Check your Lifestyle!
We all have holes in our lifestyle. To its late night snaking, to others is the 6 pack every Friday night. A the end of the month, these extras do add up. During a moratorium on spending, you have to plug these holes as quick as possible. So check your life style and try to find where your money is leaking through non-essential expenditures.
Change your life style a bit, if your debts are a result of overspending than you better know where you should press the button of NO.
Can I plug you need to exercise more to . . . and for crying out loud, put down that bag of Doritos.
Wash Rinse & Repeat . . .
After highest interest debt is paid off, put the payment amount that you used to get it paid off in record time into the next highest interest debt, and so on. The new extra money that you put forth into the next debts will increase your margin towards debt and you will feel some relief towards paying off your debts.
Once you Are Debt Free?
Using your credit card is really easy but paying them off is a hard nut to crack and that also in such time when you have tight budget. So better use your debit card instead off credit cards for new purchase, if existing bill of credit cards are not pay off. Avoid using credit cards!
Seriously, use credit cards only for purchases that you can pay off within the stipulated time. Pay off your credit card bill completely when they arrive in the main. Don’t leave even a single penny such as accrued interest or late fine these will give birth to further late fine and accrued interest. Payment within time will build your credit score and banks will consider you as a genuine credit worthy customer.
Prevent debt.
Keep a buffer amount for bills, foods and other needed necessities of living. Also put aside a little money for non-necessities; it is important to be able to buy things you want without going into debt. Keep saving money, and paying off bills so that you can pay off your debt very fast.
All these are the basic tips. Learn them, master them and you will learn the art of saving . . . believe me it works.