How to Become Debt Free in One Month
- 1). Create a budget. Budgets allow you to track expenses, organize your money and quit spending your earnings on money-sucking purchases. Even if you don't want to constantly stick with a budget, at least create one for the month you want to get rid of your debt. Write down how much money it will take to become debt free and then spend money on other expenses accordingly, so that you have enough to pay off your debt.
- 2). Use cash or debit cards to pay for your purchases. Using credit cards is only going to add to your debt.
- 3). Eliminate a month's worth of luxuries. Avoid buying video games, cancel your cable TV and stop eating out. Stop spending money on anything that's not a necessity and anything that won't result in penalty fees if you cancel the service. Don't cancel your cellphone if you will have more debt due to the penalty fees.
- 4). Take money out of your savings, 401(k) or other type of retirement account. Taking money out of your savings to pay for something that's not an emergency or investment may be difficult, but it's a great way to get debt free fast. Likewise, you may want to keep every dime of retirement money until you retire, but becoming debt free will allow you to save more money each month. Your 401(k) withdrawal will incur a 10 percent tax penalty if you withdraw the money before age 59 and 1/2.
