Five Steps To Control Your Debt

Second, make a list of your debts. In order to eliminate the problem, you have to know how much debt that you owe. Start by getting out a sheet of paper and make 3 columns. In the first column, write the name of each debt. In the second column, write your total balance owed for each debt. In the third column, write the minimum monthly payment for each one. This will allow you to get a good picture of how much you owe and which debt to tackle first.

Third, find some extra money to pay off debt each month. Take a look at your expenses and see where there are some areas that you can cut back on. For example, do you eat out more often than you should? Is there a way the you could cook healthy meals at home instead of going to expensive fast food restaurants? Some people are paying too much for car insurance and find ways to save on monthly expenses by shopping around. Many people find extra money to pay off debt by using their tax refund. Look for creative ways to save a little here and there and watch the savings add up!

Fourth, put this extra money to work and pay off debts. Look at your list of debts and start by putting it towards the one with the smallest balance. Don’t be too concerned about paying off the one with the highest interest rate. Just pay off the one with the smallest balance first. Stay focused on that one debt until it’s completely gone. After you have paid off the first debt, then start on the second one. Keep this process up. With each debt eliminated, you’ll have more money to start on the next one. After you see success, you’ll be more likely to stick to your plan to eliminate your bills fast.

Fifth, set a goal for yourself. Why do you want to be debt free? Is it to have more freedom? Would you like to start a new career? Many people reward themselves after becoming debt free by taking a vacation and paying cash for it. How is this possible? With all of your credit payments gone, you’ll have a lot more money coming in each month that you can spend it however you choose. Also, you could use this money to invest in your retirement plan. Many people are able to live the life that they want by eliminating bills first and then enjoying a debt-free retirement. Now, wouldn’t that be worth it?