7 Easy to Follow Steps to Paying Off Debt
Debt destroys not only your finances but robs you of your freedom.
To regain your freedom you must pay off your debt.
Below are 7 easy to follow steps to paying off your debt.
1.
List ALL your debt.
You can start by reviewing all your credit card statements, car loan and personal loan statements, medical statements and any loans you owe friends and family.
If you have been using the ostrich method (hiding from your creditors) you will want to get a copy of your credit report.
You can a free report every year from the three credit rating bureaus, Eqiufax, Transunion, Experian.
2.
Once you have all your debts list them from smallest balance to largest.
3.
To get out of debt you will need to know your net income.
Net income is your total or gross income minus taxes, health insurance deductions, Medical and dependent care and any other deductions from your payroll check.
4.
It is also important to list out all your monthly expenses, minimum payments on debts, mortgage or rent, food, gas, utilities, phone, cable, cell phone, satellite radio, Triple A, gym memberships etc.
Total them and subtract from your income and this is the amount of money you have to pay off debt.
This number has to be positive you need to have money left over to pay down debt.
5.
Start with the smallest balance debt and pay the minimum plus your extra money from step 4! 6.
Continue to do this each month and when you pay a debt off take that payment and apply it to the next smallest balance with its minimum payment.
7.
When all debts are paid you can concentrate on your mortgage! The above steps are essential for you to become debt free but with any plan if you spend more than you earn it will not work.
You will need to find another source of income to get out of debt.
A home based business is an excellent way to create an extra $500 or more per month.
Imagine adding an extra $500 per month to your debt reduction plan!
To regain your freedom you must pay off your debt.
Below are 7 easy to follow steps to paying off your debt.
1.
List ALL your debt.
You can start by reviewing all your credit card statements, car loan and personal loan statements, medical statements and any loans you owe friends and family.
If you have been using the ostrich method (hiding from your creditors) you will want to get a copy of your credit report.
You can a free report every year from the three credit rating bureaus, Eqiufax, Transunion, Experian.
2.
Once you have all your debts list them from smallest balance to largest.
3.
To get out of debt you will need to know your net income.
Net income is your total or gross income minus taxes, health insurance deductions, Medical and dependent care and any other deductions from your payroll check.
4.
It is also important to list out all your monthly expenses, minimum payments on debts, mortgage or rent, food, gas, utilities, phone, cable, cell phone, satellite radio, Triple A, gym memberships etc.
Total them and subtract from your income and this is the amount of money you have to pay off debt.
This number has to be positive you need to have money left over to pay down debt.
5.
Start with the smallest balance debt and pay the minimum plus your extra money from step 4! 6.
Continue to do this each month and when you pay a debt off take that payment and apply it to the next smallest balance with its minimum payment.
7.
When all debts are paid you can concentrate on your mortgage! The above steps are essential for you to become debt free but with any plan if you spend more than you earn it will not work.
You will need to find another source of income to get out of debt.
A home based business is an excellent way to create an extra $500 or more per month.
Imagine adding an extra $500 per month to your debt reduction plan!
