Categories: Finance

Make A Date To Get Out Of Debt

Debt is the issue that most people are struggling with right now. It seems that everyone wants you to get into debt, the department store, mortgage brokers, even you bank. However, when it comes time to pay monthly bills, people stop being helpful and start to get nasty. This is the year to make a date to get out of debt. This is a date you will not want to miss.

Step #1 Select a Debt

When you start paying down your debt you do not have to do it all at once. Instead select one debt at a time that you really want to get rid of. It can be a low credit limit card that you’ve had maxed out for years, or it can be a credit card with a high interest rate. Get select one for this exercise in financial liberation.

Step #2 Evaluate the Debt

The next step is to evaluate the debt that you selected. Look at its interest rate and the balance on this debt. Evaluate what you used the debt to buy. Do you even remember? Ask yourself if the debt you accumulated was worth what you bought. In most cases the answer is going to be no. This exercise is more than just an exercise at paying off your debt. It is also an exercise in learning about your spending behavior.

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Step #3 Determine a Date as the Payoff Date

If you do not establish a timeline for paying off your debt you are likely to never payoff that debt. A good strategy is to give yourself one or two years to pay off a debt. Be realistic, but also challenge yourself to pay off your debt as quickly as possible.

Step #4 Establish a Payment Plan

The next step is to figure out how much you need to pay each month in order to pay off your debt in 12 months or 24 months. To do this all you have to do is to divide your current balance by the number of months in your goal. For example, if you have a credit card with a $1200 balance you can set your monthly payment at $100 + interest accumulated each month. This will allow you to pay off this credit card in just one year.

Step #5 Lock in Your Payment Plan

All that is left is to dedicate yourself to your payment plan. To do this set up an automatic payment plan for your account. This makes it a chore to change your payment amount, so you will be less likely to do it, but it is flexible enough to allow you to change the amount if you need to.

Learn more about how to get out of debt here….

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