The Seven Steps To Get Out Of Debt
These are the seven steps to help you to get out of debt.
List Out All Of Your Debts
Make a list of all the types of debt you currently have. The first step is to face the reality of your debt. It would help if you faced the facts. Once you know the facts and the amount of debt you have, you can work to pay off your debt. You can then come up with a plan to get out of debt.
Start A Rainy Day Fund
Start a rainy day fund once you know how much you have to pay off your debt. Save at least $1,000 in your rainy day fund before you attack your debt. Your rainy day fund will allow you to have the cash to cover emergencies to prevent you from immediately pulling out your credit card to pay for an emergency. This is a simple method to help you from continuing to go into debt.
Your rainy day fund starts as a life jacket. Your rainy day fund can eventually become an anchor to hold you steady in a financial system that wants you to be in debt. Once you pay off your debts, you can build a giant F.U. fund.
Pay Off Your Debt
The first solution is to pay off any debt you may have as soon as possible. You can start by paying off your smallest debts first. You can then start to chip away at your larger debts, bit by bit. You want to start small because you will start to see results sooner. This will help you psychologically to know that you can successfully pay off your debt. You can begin to pay off your debt by following the snowball method.
Make a list of your debts from the smallest to your largest. Don’t worry about the interest rates.
Plan to make the minimum payments on all your debts except for your smallest ones.
Pay as much as you can to pay off your smallest debt.
You can repeat this method until all of your debts are paid off.
You will start to pay off your smallest debts first. You will eventually be able to pay off your medium and large debts. You can start small and pay off your debt, like a snowball; it will become larger until all your debts are paid off.
Live Below Your Means
While paying off your debt, make a point to live below your means. Cancel all the subscriptions you don’t need or use and don’t help you improve yourself. These would be entertainment subscriptions. You can stop going out to eat. You could stop buying the name brands and instead purchase the store brand. You can eliminate unnecessary expenses to direct more money to pay off your debts.
Find Ways To Make Extra Income
You can work to find ways to bring in extra income to help you pay off your debt. You could pick up extra hours and work overtime when it is offered. You could pick up a part-time job to supplement your full-time job. You could find random jobs in your area to bring in extra money. You could become a freelancer on a site like Fiverr or Upwork. You could resell anything that you no longer use or need on resell sites like Facebook Marketplace.
Bringing in extra income can help you to pay off your debt sooner.
Don’t Give Up
Never give up. Debt is common. You are not alone. You can pay off your debts. Your debt is preventing you from reaching other financial goals.
You can go from being in adverse financial health to experiencing positive financial well-being. Your mental health will improve once your finances improve.
Paying off all your debts and becoming debt free is your first step toward financial freedom.
Find Ways To Make Passive Income
You can work to find ways to make passive income. Passive income takes longer to generate compared to active income. You could work to write a book. You could create a website or YouTube Channel and eventually make money from advertisements and affiliate marketing. You could start a paid newsletter. You could sell merchandise. You could sell digital products, from music clips to digital courses.
You always want to find ways to increase your income.
We’re not for everyone.