Getting Out of Debt is Not Easy But Possible
A growing number of people today are finding ways to get out of debt. We are living in a society that is ridden with consumerism, those with the most stuff win. Regrettably, that mindset comes with a hefty price tag. The price tag isn’t just huge debts, but also stress, lack of sleep, anxiety, and worry of knowing you’re financially insecure.
Getting out of debt is often a long and winding road. Most people won’t get out of debt overnight, and often it takes years if not decades. Similar to losing weight, you won’t wake up one morning 50lbs lighter, it is a slow, deliberate process of making the right choices that you may not even like to do. The good news is, although it is not easy, most people have a good chance to get out of debt.
Before looking for ways to get out of debt you should think about what would you do after you are debt free and have extra money? Would you help a friend? Buy a car? Take a trip? Give to charity? Whatever your dream is, you need to picture of something that really excites and motivates you to move forward.
Many experts advise using an excel spreadsheet to start dealing with debt. First you should determine the lender of each debt and also the minimum payment of each debt. You should also make a quick spending plan, which outlines how much you want to spend on items. It is necessary to figure out the amount of how much surplus you can squeeze out of your monthly expenses. Let’s assume after calculating your expense you can set aside at least $100 each month.
With the list, you will know about the details each of your debt. The next step is pretty obvious, all you need to do is to find your smallest debt, pay its minimum payment plus the extra $100. After the debt is paid off, find the next smallest debt, pay its minimum payment, plus the $100 and additional money from the minimum payment of the earlier debt. The wonderful thing about this method is, you can get a significant sum of extra money each month after all of your debts are paid off, which is equal to $100 plus the total of your minimum payments.
One of the major mistakes that we often make is trying to invest money while paying down our debts. You need focus on your effort, if you chase two rabbits, you will lose them both. If you can quickly pay off a loan with 15% interest rate, what is the point of allocating your money for an investment that only earn you 10%? Quickly paying off a debt with 15% interest is actually equal to investing and getting 15% profit, because you are avoiding paying the 15% interest.
The whole process won’t be easy or fun, but with some determination you have a good chance to get out of debt. Be patient, the feeling you’ll have when you are finally debt free will completely blow you away!