Five Steps to Becoming Debt Free
You can become debt free if you follow the following steps diligently and earnestly:
Start out with an honest budget. Do some calculating on your income and your expenses. Write down your monthly income, list all your utility payments, rent or mortgage payment, insurance and everything that has to be paid every month. Then decide what you could pay every month to reduce your debt. If you don’t have enough left to pay very much on your debt, then your only alternative is to work hard on numbers 3 and 4 below. You must cut down on expenses and generate more income in order to reach your goal of getting out of debt.
Cut down on your expenses. Everyone can figure out ways to cut their expenses if they have enough incentive. Get the whole family motivated to work on this together. You could generate a serious family discussion, and it might surprise you how willing family members will be to help out. Ask yourselves if you really need something before you spend the money, and so many items can easily be eliminated from your expenses. Perhaps you could cut down on movies or other things you could do less often. Many items can be cut from your shopping list to cut down on expenses. Everyone can cooperate by turning out lights when not needed, and the grocery bill can be cut too until your debt is paid. Eat more beans and rice and a little less meat. Cut down on desserts, which we don’t need anyway.
Generate more income for your family’s budget. If everyone cooperates this can be done in several ways.
The quickest way to generate more income is for one or more members of the family to get another part-time job. Have a big garage sale. Everyone has items around he doesn’t use. Have a home project of everyone going through his or her closet and dresser and sell anything he hasn’t worn for at least a year. Kitchen cupboards can divulge appliances or other things you no longer use. No doubt there are items in the garage you no longer use. You will be surprised how much you can gather up to sell at your sale. Sell some items on eBay. Advertise any large items you may want to eliminate, such as an extra car or truck.
4. Make more than minimum payments on your credit cards. You will never get the principal paid if you continue to make minimum payments. You will continue to pay interest on interest, and it’s difficult to get ahead on debt that way.
Consolidate your credit cards. Transfer all your credit card debts to the one that charges the least interest. That way you will only have one bill to pay every month instead of several.
It might take a few months or even a year or two to climb out of your debt, but you can do it if you stay with it. Keep thinking how nice it will be when you are debt free. Hopefully you will then know how to stay in that position so you won’t have to ever go through this again.
To give you more incentive and other ways to strive for your goal of getting free of debt, read the following three articles on the Internet.
Steps to Eliminate Debt by Stephen Ashton
Become Debt Free by Kimberly A. Griffiths
Get Free From Debt by John Savage