Things You'll Need:
- Hard work
- Perseverance
- Diligence
- A budget
- A plan for debt reduction
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Step 1
Begin by gathering all statement related to any debt that you might have. This would include credit card statements, home mortgages, home equity loans, student loans, vehicle loans etc. You need a clear picture off all that you owe.
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Step 2
Organize these debts in an order that makes sense to you to prepare for rapid payoff. Some recommend organizing them from lowest amount to greatest amount. Others believe in organizing them from greatest interest rate to lowest interest rate. The choice is yours.
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Step 3
Attack the first debt with everything that you've got. Fine tune your budget and squeeze every last dime out of it in order to pay off the debt faster. Put things up for sale if you have to! Meanwhile, continue to pay the minimums on all of your other debts.
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Step 4
Once that first debt is paid off, move onto the second debt. Make sure to use whatever you were using to pay off the first debt, now goes to pay the second debt. You should now have even more money to pay off debt number two considering that number one is paid off.
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Step 5
Repeat this process until the final debt is paid off. This process is sometimes called a "debt snowball" or a "debt avalanche".
