How to Get out of Debt Fast

"Is debt weighing you down?" the ad queried above an image of a stressed woman holding a pencil as she poured over credit card bills. Seeing this message every time I logged in to my bank account online really annoyed me. Yes, it was weighing me down, and I was trying to get out from under the debt, but the daily reminder irked me. Perhaps it even helped motivate me to get my finances in better shape, although my motivation level was already quite high. Once you realize the effects of consumer debt, you want out. At least, I did. Here's how to get out of debt fast.

Instructions

Difficulty: Moderate

1. Get a realistic picture of your debt. Locate all of your most recent statements for credit card accounts, financed purchases, student debt, personal credit lines and home equity loans. Add the outstanding balances to arrive at your total non-first-mortgage debt amount.
2. Find out how much money you can put toward your debt each month. What is your income, and what are your monthly expenses for housing, transportation, food and incidentals? Subtract these costs as well as monthly debt bills, from your monthly income number. The remainder is what you can hopefully put toward debt each month.
3. Make more money if you have a shortfall or only a small amount to put toward debt each month. Look for a second job or pick up extra hours at work. Cash flow is critical if you want to know how to get out of debt fast. The only two ways to improve cash flow are to 1) make more money or 2) spend less money. You'll likely want to do a combination of these two.
4. Budget your money and make your extra debt payment toward your smallest debt. Once that debt is paid off in full, add the whole amount you were paying toward that debt, into the payment for your next smallest debt. Dave Ramsey calls this the Debt Snowball.
5. Cut back on your regular expenses as much as possible. Buy used, repair what is broken, and forgo luxuries. Put your savings toward your debt. Make payments in the middle of the month if you have to in order to keep from spending it.
6. Use coupons and shop the supermarket sales to save money on your food budget (see Resources, below, for a good coupon site). Also consider planting some of your own herbs and vegetables in the spring and summer.

Tips & Warnings

• Get an extra job to pay off debt more quickly
• Sell what you can and use the cash toward your debts. Look in your storage areas for seldom-used items.
• Sell vehicles that have large loans.