If you’re one of the many Americans saddled with credit card debt, you’re probably looking for a way out. Getting out of debt can seem like a daunting task, but it’s definitely possible with a little bit of planning and discipline. Follow these steps and you’ll be on your way to a debt-free life in no time.
Step One: Figure Out Where You Stand
The first step to getting out of debt is to take a close look at your financial situation. How much debt do you have? What is the interest rate on each of your debts? What are your monthly expenses? Answering these questions will give you a good idea of where you stand and how much work you’ll need to do to get out of debt.
Step Two: Make a Plan
Once you know where you stand, it’s time to make a plan. The best way to get out of debt is to create a budget and stick to it. This means knowing exactly how much money you have coming in each month and exactly how much money you need to spend on essentials like rent, food, and transportation. Once you have your essentials budgeted for, you can start putting extra money towards your debt each month.
The key here is to be disciplined. It can be tempting to overspend when you’ve got extra money left over after paying your bills, but resist the urge! The only way to get out of debt is to pay more than the minimum payment each month. The extra money you have left over should go towards your Debt Reduction Fund so that you can put a dent in what you owe.
Step Three: Attack Your Debts One by One
Once you’ve got a budget in place and you’re making additional payments towards your debts each month, it’s time to start attacking them one by one. Start with the debt that has the highest interest rate and focus on paying that off first. While you’re working on paying off that first debt, make sure you’re still making the minimum payments on all of your other debts—you don’t want those late fees piling up!
As you pay off each debt, your extra money will be freed up so that you can put more towards paying off the next debt on your list. Before long, all of your debts will be paid off and you’ll be Debt-Free! Woo hoo!
Paying off credit card debt can seem like an insurmountable task, but it’s definitely doable with some planning and discipline. Follow these steps and you’ll be on your way to being Debt-Free in no time!