How to Get Out Of Debt Now !

If you are Drowning in Debt, I can throw you a life preserver. But are you willing to SEE it?

Instructions

Difficulty: Moderately Challenging

Things You’ll Need:

• Dedication
• Perserverence
• Strong Will
• Desire to be Debt Free!

1. So you've dug yourself into a deep financial PIT? I have been there. The best advice I ever received? STOP DIGGING!
   
   A Financial crisis or meltdown is a stressful situation. Just remember that it is Temporary. Unless you don't change your lifestyle and line of thinking it can happen again, but it's still temporary.
   
   The first step to get out of debt, is assessing the situation. Years ago, when I went through training to become a Paramedic, that was the Mantra. "Assess the situation" (sweeping your arms). It prevents Danger to yourself and allows you to pull back for a moment (remove yourself from the matter at hand and really LOOK at what's going on).
   
   You MUST open those envelopes. Categorize them by Debtor and urgency. Collection notices are pretty urgent. Don't get overwhelmed or burst into tears, act like an independent third party sorting through these statements.
   If you must, you can seek help. Call an accountant. Some of them will do it. Just make sure you have cash. Maybe $100.00 or so.
   Also, Cut up a few cards. If you have any that are still good or aren't late, concentrate on paying them. Try to salvage something of your credit.
   Even if you are BARELY paying everyone, it is important to admit that you have a problem.
   Don't close all of your accounts or give up. NEVER GIVE UP!
   Closing accounts can ruin any good credit you have left.
2. Once you have all of your bills separated and categorized, add them up. See what you owe. This is called Facing your Monster (Debt Monster).
   If it is over $20,000.00, CONGRATULATIONS! You are an Average American!
   
   Now you need to formulate a plan. Paying off the highest interest loans and credit cards is the best plan. If you can do it, by all means DO IT!
   If you have $20,000.00 in Retirement, savings or investments... DON'T use it to pay off everything at once. You will likely charge everything right back up! If you have ever been the recipient of a Windfall of money or a refinance, you can relate. Save your cash.
   It is better to use your resources to pay off the highest interest rate. Then make extra payments with the money you save from not paying the high rate bills.
   Also consider scaling back your spending to reduce the chance of being in this situation again.
   
   If you don't have 2 pennies to rub together, hang in there. I have something for everyone.
3. The most effective way to pay down your debt is to reduce your living expenses.
   It sounds easy, but this can make or break a household.
   For example: reducing Luxuries like shopping trips, Designer coffees and memberships can add up to several payments on debt.
   Look at it this way: YOU OWE MONEY TO SOMEONE. You borrowed it, you spent it, now you MUST pay it back. BE GLAD IT'S NOT LIKE IN THE MOVIES, WHERE THE GUY'S YOU OWE MONEY TO KICK DOWN YOUR DOOR AND BREAK YOUR LEGS!
   Reducing your monthly bills CAN get you out of debt. One way to keep track, is to carry a notepad. Write down everything you buy, no matter how small. Also, keep your receipts. Audit them for items you could have lived without.
   If all else fails, it's time for DRASTIC MEASURES! CUT UP YOUR BANK CARD AND LOCK UP YOUR CHECK BOOK!
   Set up Bill Pay on your computer and DON'T LOOK BACK.
   You allow yourself an allowance and stick to it.
   Draw out $20.00 cash, or $500.00 cash, whatever you think you can live with for a week. When I say, live with... I mean MINIMUM!
   If you spend it all on Monday, you will be in BIG trouble the rest of the week.
   This goes for Gasoline, Lunch, Coffee, etc.
   Consider packing a lunch and carrying a travel coffee mug instead. For some folks, it sounds UNTHINKABLE. DO IT!
   If you are really TRULY broke... Consider this:
   You got yourself into this mess, YOU can get yourself out!
   
   Drastic times call for drastic measures! There are MANY sources for money.
   If your Credit is still really good... try another loan that will pay off the big interest stuff. By The Way... the big interest loans usually have the highest payments.
   If your credit is SHOT, you don't own a home or are in danger of losing it, it's time for DEBT BOOTCAMP!
   I wish I could be there to follow you around, screaming at the top of my lungs and making you DROP and give me 50 Push-ups! But I can't, so it's up to you!
   First, eliminate anything you Can LIVE without!
   If you buy 5 POUNDS of prime Steak and Lobster Tails every week, it's time to cut back! (That includes eating out).
   If you have a vehicle that gets 10 miles to the gallon, sell it outright (if you can), or cut WAY back on driving. Keep track of mileage, carpool, take the BUS or Train, and BY ALL MEANS... STOP spending ALL of your money on Gasoline. If you only drive 100 miles a week, and only go to and from work, school, etc. You will need to trim your bills somewhere else.
4. Figure out how much you TAKE home for the household. Then figure out EXACTLY how much you are spending. Yes, you need to be EXACT!
   If you bare spending more than you make, there is a serious PROBLEM! No kidding huh?
   It may seem obvious, but spending more than you make puts you in debt. SPENDING MORE THAN YOU MAKE PUTS YOU IN DEBT!!!!!
   If you identify the problem, you can FIT a solution that meets your needs.
   The basic expenses for most people are as follows.
   A roof over your head. This is RENT or MORTGAGE. Not much you can do about that unless you can take on a roommate or get another family member working.
   FOOD. Most people like to eat. This is an area that can be trimmed quite a bit. First, be honest with yourself. Could you stand to lose a few pounds. ONE PROBLEM AT A TIME. But you can cut back on certain things.
   For example, EATING OUT. One meal at a NICE chain restaurant for 4 people could buy a WEEK's worth of Groceries!
   Also, prepared foods. We all fall into that trap from time to time. No time to cook... buy TV dinners, prepared food, etc.
   Bulk meat (such as flash frozen Chicken Breasts).. can be an alternative. Thaw and cook with instant rice. 30 minutes TOPS! A 5 pound package of flash frozen, boneless, skinless breasts runs about the same as 4 TV dinners!
   If you MUST buy prepared foods or just Like them, use coupons!
   Instead of eating out, buy a pizza with a coupon or from the warehouse stores. Try to avoid the "Extras", like drinks, Bread, Desert, etc.
   Also,
   If you enjoy going to the movies, try Weekend matinees or HOME movie night.
   You can "CAP" Cellular phones to keep bills down, or ask about better plans.
   Same thing with Cable television, reduce or change plans for lower bills.
   Which brings us to utilities.
   Turn off lights, replace seals around doors and keep the Thermostat down during the day.
   This is all temporary until you get yourself out of debt. Once you eliminate those payments, you will have more money for the "Extras" in life.
   Water bills are usually what they are, but be mindful and try to use less.
   With Garbage service, try recycling if it's convenient. It'll cut your garbage amount in half, possibly costing you less.
   With telephone, you can turn off long distance, get a computer based phone or use your cell phone "Off Peak".
5. Once you have trimmed some FAT, it's time to budget. Take the amount you take home, and subtract your basic bills. Now take the amount left over and subtract your MINIMUM payments for your DEBT.
   Now, take the amount left over and subtract your allowance.
   Whatever is left over is "Extra" money. Not extra SPENDING money....
   It's there for Emergency, Clothing, Entertainment and DEBT.
   If you can live without clothes and MOST entertainment, you should set aside $100 or so for emergency, and split the rest over several DEBT payments.
   This doesn't happen over night! It could take a YEAR or MORE! Hang in there!
   
   NOW, if you didn't have ANYTHING left over after BASIC bills and you were HONEST... you are REALLY in trouble!
   Time to break out the BIG guns!
   If you have child care, and a partner, it might be time to re-evaluate. Depending on how much you spend on child care, it might be worth it to have someone stay home.
   That eliminates Gas, Possibly a car payment and child care.
   The person with less benefits, lower pay or home business skills, should stay home.
   If you both MUST work or if you have TEENS, you might have to "MoonLight". Try a second job, Online Auctions, Work From Your House Part Time Businesses or Making and selling crafts. A Paper route with a Van and Teens can bring in extra cash EARLY in the morning. Also, weekend at UPS and other businesses around the Holidays can bring in extra money.
   Guy's (or girls)... you can bring in extra money by finding "Fixer Upper cars and trucks or vintage cars and reselling them for Profit. An Extra $1000.00 a month could mean the difference between FORECLOSURE or BANKRUPTCY and Getting out of Debt.
   Just try to stay positive and involve the ENTIRE family. NEVER try to hide Financial trouble from your kids. You should NOT tell them that Mom and DAD are losing the house or going to get EVICTED. BUT, you MUST tell them that things are rough, Money is tight and WE ARE IN DEBT AND NUST GET OUT!!!
   If you hide it from them, they will likely follow in your footsteps.... buried in DEBT.
   Teach them as you learn to budget, Let them help out!
   It will bring your family closer together.
   
   REMEMBER: YOU GOT YOURSELVES INTO THIS.... YOU CAN GET YOURSELVES OUT!!!!!!

Tips & Warnings

• STICK TO YOUR BUDGET!
• SET GOALS!
• CUT BACK ON SPENDING!
• NEVER GIVE UP!
• Make sure you understand applicable taxes from extra income.
• Never shut off HEAT or cause illness by cutting back healthy food!
• It is YOUR job to take care of yourself and Loved ones.