create your own

The 5 Step Plan to get out of Debt

64
rate or flag this page

By Anamika S

5 Step Plan for Managing and Getting out of Debt
5 Step Plan for Managing and Getting out of Debt

Getting out of Debt

Getting out of debt and staying debt free is not an easy task, but not an impossible one. Chances are you didn't get into debt in a day, and you won't get out of debt in a day. Here is an easy to follow 5 Step Plan which can help you get out of debt.

  1. Make a List of all your Debts : First of all, figure out how much you owe, to whom and on what terms and write it down. It is advisable to pay off debts for which you are paying high rates of interest first and then the rest. Also paying off the debt with the smallest balance would give a sense of accomplishment and motivation. You needn’t hurry to pay off mortgages and home equity loans only ensure that you do not default on payments. Make a plan to tackle the debts over a period of time and make provision for the same. If you have credit card debts try to get a reduced interest or opt for a balance transfer with a low interest rate. Refinancing or Debt Consolidation loan at a lower interest rate can be considered too depending on your debts. Also figure out the minimum amount to be paid every month to clear off your Debt.
  2. Stop taking further Debts : The first step towards debt management is avoid getting into new debts. Stop spending on credit Cards and make sure not spend money on anything you cannot afford, probably the reason why got into debt at the first place. Get into a habit of paying your bills on time.
  3. Create a Cash Cushion : Create a contingency fund for emergency expenses which would be easily accessible when the need arises. You could make some money by selling unnecessary stuff lying around or taking up additional income source to supplement the income. Try to stretch your money.
  4. Make a Budget and Record all income and Expenses : Make a Budget based on your expense also including a provision for paying back debt. Keep a Record of your Income and Expenses: This actually helps you to track your spending and also avoid unnecessary expenses. Also prioritize your monthly expenses and you'll be able to figure out where you might need to cut back on spending and live within your means.
  5. Start paying off the Debts: This time don’t fail on your monthly repayments.

If are unable to handle the debts on your own seek help and join support groups where you can get assistance.



  • 10 Advantages of Freelancing as a Profession

    There are several advantages to freelancing jobs. Freelance jobs are most suited for work at home moms, students, elders or disabled people who make a living or supplement their income.There are several advantages of Freelancing. - 13 months ago

  • RedGage – A Site for Bookmarking and Making Money from Web Content

    RedGage is a social book marking and social networking site that enables you to share what you are doing online. This site is a single location for all your activity on the web. Through this site one can build back links for all your online content. - 3 weeks ago

  • How to make hundreds of Dollars with ClickBank Storefront?

    ClickBank is one of the most trusted and reputed affiliate programs. ClickBank or CB as it is popularly known has thousands of digital download products like eBooks, video tutorials and software and over 1, 00,000 affiliates. Clickbanks refund policy is one of the best in the industry and provides 100% safety to the buyer allowing an 8 week period from the buying date to claim refund in case of any problem. With CB the seller can list his product publisher lists the product with ClickBank and af - 9 months ago

Comments

RSS for comments on this Hub

No comments yet.

Submit a Comment

Members and Guests

Sign in or sign up and post using a hubpages account.


optional


  • No HTML is allowed in comments, but URLs will be hyperlinked
  • Comments are not for promoting your hubs or other sites

  • Watch out when debt settlement firms make promisesEverett Herald2 days ago

    NEW YORK — Reduce your debt by 60 percent! Stop collection calls! Be debt free in 12 months! The siren song of debt settlement firms is getting harder to ignore these days, especially if your finances are out of control or creditors are knocking at the door.

  • Bob Shallit: Upscale Granite Bay center seeks to dig out of debtThe Sacramento Bee1 second ago

    Granite Bay's swanky Quarry Ponds center has filed for Chapter 11 reorganization – a step, its owner says, toward getting back in the black.

working