Are you ready to start your journey of becoming debt free? Car payments, credit cards, and student loans are probably just a few of the things that are keeping you in debt and causing you stress. Well stop worrying, all you need is a little persistence and a smart plan to tackle that mountain.
So if you’re ready to become debt free, let’s get started!
1) Emergency Fund
The very first thing you need to do is create an emergency fund of at least $1000 in a savings account. This money is for emergencies only, not shopping trips or vacation. Once you’ve accomplished that, start putting every extra dollar toward your debt. Of course, you always want to pay for your basic needs first, things such as food, rent, and utilities.
Start cutting back your expenses and implementing creative ways to save money as soon as possible, so you can get out of debt fast. Watch how much you spend on food, this can be one of the biggest money drains on a family budget.
2) List Your Debt
List all of your debt balances in order from smallest to largest. Do not worry about interest rates right now. You want to see results as soon as possible to start by paying the smallest debt first. Pay the minimum amount necessary on all your other debt while you’re putting everything you can toward the lowest balance.
3) Pay Off Debt
After you pay off the first debt, you move to focus on paying off the next debt from your list. When you start seeing results, it will motivate you, even more, to become debt free. If you want to speed up the process of getting out of debt, you might try some other ways to earn more income. Have a yard sale or try buying some stuff at a yard sale, fix it up and resell it on eBay or Craigslist.
4) Create A Budget
Create a budget. The thought of a budget makes most people think of lack or deprivation, but it’s a simple way of keeping track of where your money is going. To organize your expenses, you could use a budget sheet or an app like Mint. Make sure you get the whole family on board with getting out of debt. Let us know in the comments below how you’re doing with getting out of debt.