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Tips to get out of Debt Fast
How to Get Out of Debt Fast
Not to long ago I had a lot of debt like most americans and I was struggling on a way to get out. I felt trapped and like my balances on my credit cards kept getting higher and higher and there was nothing I could do to get out.
Debt is horrible and it is a horrible feeling to be trapped in a situation where you owe someone else money. You feel like you have no control over your finances and it is impossible to get ahead.
Like anything in life, getting out of debt requires diligence and will. You have to really want to get out of debt or nothing is going to happen. The fact that you are reading this article shows that you have the will to get out and that is the first and most important tool. I can give you all the tips and knowledge I acquired the hard way, but knowledge is useless if it is not applied.
When we look at getting out of debt there is really only two major factors that it boils down to. How much money you make and how much money you spend. Pretty simple huh? Well some things are easier said than done.
1) First and foremost get an emergency fund.
Everyone needs a safety net because no one know what life will bring. You should not start paying off debt until you are secure with some money for a rainy day. I know this advice is redundent and is all over the place but that is because it is so important. Shit happens and you want to be prepared when things start taking a turn for the worst.
2) Track and cut your spending.
There is no way to get your finances in order and get out of debt if you do not know where you money is going every month. If you don’t know that you are spending 300 dollars every month on coffee then how the hell are you going to trim off the fat in your budget.
Print out a recent bank statement and see exactly where all your money is going. Write down your spending for a day and track where your money is going. This is the first step to a long term life of good finances. So many people today just spend money without thinking about it and doing this is very dangerous for your finacial health.
Trust me I’ve been there. I was at a point where is was not able to save any money and it felt like I wasn’t going anywhere financially. My bank account was not growing at all and I didn’t track my spending so I didn’t see how much money I was wasting on things I didn’t need.
In this society we focus too much on what we don’t need and think that spending money on junk is going to make us happy. It’s not and we really need to take a look at our lives and see what really makes us happy.
If you’re anything like me, things that make you truly happy is helping other people, doing what you love, taking care of your family. Not that new T shirt that you just have to have.
Now I’m not an advocate of living a spartan lifestyle and i think it is important to indulge on things that you love and there is plenty of time to do that when you have extra money. But if you find yourself living from paycheck to paycheck it is not the time to be living like you are a king and buying the most expensive items, food, and entertainment that you can. This is the path to financial ruin and is going to gimp you from living the life that you truly want to live for the rest of your life.
Track what you are spending and lay it all out. Your finances are not magically going to get in order unless you do something about it. Unless you make an effort. Once you track how much money you are spending every month you can see exactly how much extra money you have every month. If you have 400 dollars extra every month you can start allocating your extra money to an emergency fund and getting your debt payed off.
If you find yourslef making less money than you spend every month then you have to make so adjustments. Which brings us to our next way to pay off debt.
3) Increase your income
Simply put when paying off debt, you can either spend less money or make more money. Finances are pretty easy when you break it down and cut away all the bullshit.
Making money is not the easiest thing in the world to do or everyone would be rich. It takes a lot of hard work, dicipline, and knowledge.
If you are in a lot of debt right now. Sell some stuff that you don’t need. This is so simple and easy and will really help you eliminate debt that you have. Have a garage sale, sell some of your unwanted items on ebay or craigslist.
One of my students got completely out of debt and stashed 10 thousand dollars in the bank by getting a side job bar tending.
This gets me to one of the biggest mistakes that people make when they start making more money. They just add more to their expenses. I have been guilty of this in the past as well. When I got a raise and started making more money I thought it was a good idea to get that car I wanted or buy that item that I always wanted. Wrong.
One of the biggest financial mistakes that you can make is adding to your debt and expenses just because you start making more extra money. Doing this is going to just add to your expenses and prohibit you from saving and paying off debt.
Paying off debt isn’t easy or fun. It takes hard work and I’m not going to lie to you and say it is the easiest thing in the world to do. I’m not that type of person. Does it take hard work? Yes, but it is worth it and you will thank yourself later for doing it. It takes discipline.
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