How to Get Out of Debt

How to Get Out of Debt
Break Debt Trap and Save Money

Thursday, 19 May 2011

Get Out of Debt

Debt is like a disease as it increases day by day. It attacks your mental health and makes you weak physically. Get out of debt and maintain a simple, happy and normal life

  1. Stop acquiring new debt.
  2. Make a plan
  3. Get out of it

Stop acquiring new debt
Do this now.  If you keep taking debt again and again (don’t matter how small it is) then you will never get out of debt.

Make a plan
Make a plan how can you get rid of your existing debt & spend your hard-earned money. Here are some tips that you can follow. Hope it will help you.

Write it down
Write your monthly income and your expenses in detail. Also write how much debt you pay per month with interest. Write down groceries, gas, clothes and all kind of expenses. Co ordinate it with your existing cash balances. Create a personal "balance sheet" a list of what you own and what you owe.

Stop using credit card
Now stop finance anything and stop using your credit cards. Sometimes credit cards become a trap. As you get tempted to buy some unnecessary thing and as you using credit card you actually don’t feel how much money you lost by this transaction. On the other hand if you use cash transaction it will give you a positive stress to minimize your useless transaction. You also have to give some credit card maintenance bill per year.

Cancel membership
If you have gym or other types of membership, try to cancel as many as possible. Cancel anything that automatically charges you a credit.

Establish an emergency fund.
Why save before paying off debt? By this you become able to give your debt at a time. And it also gives a security and mental peace.

Re-learn frugal habits
Use coupons, buy in bulk or take a walk instead of using transport and so on. By your simple frugal habit you can save huge amount of money. But treat yourself occasionally or take a vacation. You will feel more stress free.

Increase your income
Do a part time job or any kind of extra job. And you can sell some furniture or stuffs. Do what you can to increase your income

Stay motivated.
Most people leave their plan for less motivation. So keep yourself motivated. Try to think how you feel when you get out of your debt trap. And remind yourself monthly of the progress you've made. Do meditation.

Get out of it
Now final step is to attack your existing debt. You can do thin by many ways. Put certain amount of money to pay toward all debts each month. Or start from lowest to highest or highest to lowest. Personally I think pay off your smallest debt first can be a good idea.

Dear READERS, that’s all from my part. One more things I can share is don’t wait for next week to start or tomorrow to start. Start it now.