How to Start a Debt Elimination Plan

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By Jonathan West
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Eliminating debt can be one of the most frustrating things a person has to do in their lifetime. Sometimes it seems like the debt just keeps piling on, and it becomes hard to stay motivated to keep paying something that never seems to go away. Starting a debt elimination plan may be just the thing you need to do, as forming a strategy on tackling your debt effectively may be just what you need! Here’s what you should do.

Difficulty: Moderately Challenging

Instructions

Step 1

The absolute first thing you should do before getting rid of your debt, is to prevent yourself from adding more debt. This may include cutting up those ATM cards, stopping yourself from going to the mall every weekend, or delay buying that sports car you’ve always wanted. The more debt you have, the more important this first step becomes, because you cannot afford to add more problems to what is already weighing you down!
Step 2

Now that you have prevented more debt from accumulating, your next step is to open up more avenues to obtain money to pay off your current debt. This should be the second thing you do, because many people attempt to pay off their debt but realize that they have very little money to spare and don’t know where to begin. By adding more income or freeing up some of your current income, you make tackling your debt much more effective and convenient. There is no single method in freeing up or adding income, but there are many ideas available to you. Some ideas include having a garage sale, selling unused items online, having a stricter grocery budget, eating in more often, or even paying for things only in cash. Whatever is most comfortable for you is the best option to go with.
Step 3

Then, start off your debt elimination plan by knocking out the debt with the highest interest. This is vital, as you don’t want to be paying more then you absolutely have to. Use that extra income you’ve freed up to help in paying for it. Look to aim your goals much higher than the minimum monthly payment. Instead, try and pay as much as you can now rather than later. Point your focus on one piece of debt at a time, don’t spread your money around otherwise it won’t feel like you are doing much progress!
Step 4

Once you’ve paid off your higher debts, you should have freed up even more income since you don’t have to pay that anymore. Don’t stash that extra money into a savings account, or use it to go to a fancy restaurant! Instead, add that portion to the rest of the money you will be using to pay off the debt with the next highest interest rate. Keep going down the line until you have paid off all of the debt. Although this is easier said than done, by following this process you give yourself the tools and mindset you need to really get rid of your debt once and for all!