How to get out of debt

Have you managed to get yourself buried under a mountain of debt? There is a way to dig yourself out!!! Just follow my steps and you will be on your way to debt relief.

Instructions

Difficulty: Moderately Challenging

Things You’ll Need:

• A calculator
• A pad of paper
• A pen
• A pair of sissors

1. The first thing you will need to do is make a complete list of all the debt you have. This will include debt you owe friends or family, credit cards, loans, etc.. Your list should include what company or person your debt is with. How much is the pay off amount (you may need to call to find out). Also find out what the interest rate and monthly payment are for each item.
2. Now under that list make another list of all other expenses you incur on a monthly basis. I.E. utility bills, groceries, gas, child care, entertainment. If you want to be extra thorough include how much you spend on birthday presents, clothes, etc. These are expenses you accumulate monthly and probably don't account for.
3. Now you must take responsibility for your debt. No one else will. Commit to paying it off and to taking the steps to make this happen. Cut up your credit cards. Right now!!! Go get them and do it!!! Simply telling yourself you won't use them is not going to work. Make it so you really can't use them. If you must keep one for an emergency but give it to someone you can trust who has good judgement. This way you have to ask them for it in a real emergency.
4. So to get out of debt you need money. A book I read said you should cut back on things you can do without. Take that money and apply it to your highest interest card/loan first. If you are like me you are already cutting back and have no extra money at all. Do whatever you can to come up with extra cash. Get a second job, sell things, write articles on here, whatever it takes!. When you do have extra money apply it to your highest interest card/loan. Birthday money, tax rebates, and other unexpected income should go towards your debt also. You have no money really until that debt is paid off. Once you pay one item off, take the money you were paying, and apply it to your next highest card/loan and so on.
5. Click image to make bigger! This is where you get organized so you can keep this good thing going! I used Microsoft word to make a simple grid. You can use a piece of paper to get started. Along the top I put, What, Amount, Due by, and Action. Then along the side going down the page I listed what my debts, and bills are for the month. Then just fill in the blanks. For example, I have a loan, I am supposed to pay $300, it's due by 06/31, then when I pay that loan I put in the action box paid and the date. I paid $50 extra so I put paid $350 on 06/25. If there is some kind of conformation # you can include it in that box. At the bottom of this page I list each of my pay check dates for the month, and list the amounts of the checks when I get them. This way you can total your bills and compare them with how much you are making, to see if you really are putting all you can towards the bills. If you click on the picture the chart I used will be enlarged.
6. I wanted to be able to save some money too. I have heard that if you have debt you shouldn't save money at all. I feel like it is important to have a little put away so you can take a vacation, treat yourself to dinner, or just have it for an emergency. Anyway I could never hold on to money. Anytime I had some I would spend it so this is what I did. My work offers direct deposit. I decided I basically had three thing, Bills, Saving, Extra money to live on. So I got three checking accounts at different banks. I used the page from step 5 to see how much my bills add up to each month. I had direct deposit automatically put that much into my "bills checking account". I then found a bank that offered a good interest rate on there checking accounts that didn't have any location in my state, (this way it would be harder to get to the money). I decided I wanted $50 bucks of my check to go to this "savings checking account". Then whatever is left goes into my third checking account, and this is my "spending money checking account". This is the only account I carry a debit card for. Even though I have one for all three just in case of a real emergency. If your work offers direct deposit, this is very simple to set up.
7. I believe that if you commit to paying off your debt you can. If I can start doing it anyone can. You just can't get discouraged. You have to remember that it will be worth living like a pauper for a while if it will make you a king/Queen in the end!!!

Tips & Warnings

• These steps worked for me but this doesn't mean they will work for you.