How to Get Out of Debt Quickly

We all have debt that seems to be overwhelming and the numbers seems to get larger and larger. Here's a quick way to get yourself out of debt and be FREE.

Difficulty: Moderate

Instructions

Things You'll Need:

• Pencil (not an ink pen)
• Paper
• List of all your debts
• Calculator
• Patience

1. Stop adding to your debt load. If you can't pay with cash, DON'T BUY IT. Simple as that.

2. Earn an extra $200 a month. I know it sounds hard, but it’s actually easy to do if you apply yourself. You can sell items on EBay or Craigslist, write E-how articles, have garage sales. (Better yet, buy your stuff at yard sales and sell them on EBay / Craigslist) Babysit. There are a numerous of small ways to add an extra $200 a month to your income.

3. Write down your debts. On a sheet of paper draw 4 columns, head those columns as Debt Name, Balance, Monthly Payment and # of Months.

4. Categorize your debts. Write down your debts starting with the debt that will take you the least number of payments to pay off and continue on up to the one that will take you the most number of months to pay off.

5. Pay on time.
   Of course you will make your monthly payments on time on all of your debts listed you will however add that extra $200 a month to the debt that you listed as the first one that will take you the least number of months to pay off.
   Example. You owe ABC Co. $600 and your regular monthly payment is $75 a month which will originally take you 8 months to pay off. Instead you will pay them the regular 75.00 plus the $200 from the extra income. Therefore you will pay them 275.00 a month and pay them off not in 8 months but in 2.18 months.

6. Move to the next debt in line.
   After you’ve paid ABC Co off, start with the next debt in line.
   
   Example. You owe XYZ Co. $1000 and your regular monthly payment is $100 a month which will originally take you 10 months to pay off. Instead you will pay them the regular $100 plus the $200 from the extra income plus the $75 that you were paying to ABC Co. Therefore you will pay them $375.00 a month and pay them off not in 10 months but in 2.66 months.

7. Continue to work the list
   After you’ve paid off one debt go to the next one in line and repeat the steps. When you reach the debt that would have taken you the longest number of months to pay off. You will pay them your regular monthly payment plus the $200 from the extra income plus all the amounts you were paying to the other companies that you’ve now paid off.

8. ENJOY YOUR DEBT FREE LIFE.

Tips & Warnings

• If you’re not able to earn an extra $200 a month, start with $50; whatever will work for you and your circumstances.
• As your debt decreases on the debts that you’re making just the regular minimum payment to while eliminating the debt that you’re currently working with by paying the extra income with, you’ll want to just go on your sheet and change those figures to their current status.
• Some financial experts advise you to pay off your debt starting with the one with the highest balance or one with the highest interest rate which is also great advice. Of course you want to get the balance down as quickly as possible but it’s the monthly payment that affects me the most and this is working for me. I hope it works for you. You should do whatever works for you and your situation.