Turning the Impossible to Possible: 6 Keys to Getting Out of Debt
Wednesday, August 6, 2014, 1:00 AM | Leave Comment
Many Americans are drowning in debt. Much of this debt comes when people want to keep up with the neighbors. Much of it comes from important purchases like a home or an education. Regardless of the reason, a mountain of debt is a crushing burden that can keep people in economic bondage to creditors and keep them enjoying life as much as they should.
Here are five steps that can help erase debt.
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Decide to Start with a Budget
Any process has to have a starting point. Those who continue doing what they have always done will continue to get the same results.
They will continue to drown in debt. What needs to happen is a conscious decision to get out of debt.
A budget is necessary to ensure that every dollar is accounted for and that no additional debt is incurred.
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Stop Using Credit
Credit is an important asset, but those who are able to avoid using it will be in better financial shape than those who use it frequently.
Interest is money that goes to a bank that does not have to. That money could better be used for getting out of debt and building a nest egg.
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Pay the Minimum Due
It is imperative that those wanting to get out of debt pay the minimum on every outstanding debt each month. This will avoid having to pay late fees and higher interest rates that are likely to come with late payments.
Late fees can take out $30 or $40 each, and this money could better be used to pay off debt.
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Organize the Debt
One of the most important steps in getting out of debt is knowing how much debt is owed. One of the more common methods recommended by financial planners is to organize the debt from smallest to largest.
A board or spreadsheet that has this information posted where it is easily accessed will keep the goal in sight. It will also provide a great visual for the final step.
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Start Knocking off Debts
Once a person knows what they owe, they can then systematically start paying it off. Getting an extra job or selling some unused items might be important to get some cash flow going in the early days of the process.
After paying the minimum due on all debts, any excess cash from the budget show go to the smallest debt. This will get it paid off more quickly.
Then that money can be rolled into the smallest remaining debt. The process should continue until all debts are paid off.
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Hiring a Financial Consulting Firm
According to D Thode & Associates, it might take years, but the vast majority of those who are diligent can pay off debt.
In some instances, the problem might require the help of a professional. Those who need help with excessive debt should not hesitate to contact a financial consulting firm to help get their feet back on a sound financial footing. The process might be painful, but it can pay great dividends in the future.
The one thing that you should take away, is that getting out of debt is not impossible. Follow these steps above. Know that the road to getting out of debt won’t be easy and it may require some sacrifices to be made, but it will be worth it.
The day that you become debt free will bring you an overwhelming sense of freedom and it will allow you to live your life in peace without having to worry about how you are going to make ends meet.
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