How To Get Out Of Debt
Being in debt can feel like a never-ending cycle.
Every month, you make payments, but your debt doesn’t seem to get any smaller.
It feels never-ending, but you are committed to it.
And that is the exact place I found myself when I started with my home and car amortization payments back then.
I am a bit aggressive — and purchased both by faith.
And now, another piece of property I bought three years ago will start its loan amortization early next year.
With the rising prices — and unexpected expenses for the year, I am pondering what steps I took before so I can apply them again soon.
So if you are all stressed out, wondering if you will ever be able to get out of debt.
The good news is — you can
It might take some time and effort, but there is light at the end of the tunnel.
1. Know where you stand. The first step to getting out of debt is knowing exactly how much debt — you have. Make a list of your debts, including the interest rate, minimum payment, and balance for each one. It will help you create a plan to pay off your debts.
2. Create a budget. Once you know where you stand with your debts, you can create a budget to help you get out of debt.
Start by figuring out how much money you have each month — and what your fixed expenses are (such as rent or mortgage, car payment, etc.). Then, figure out how much money you have left over each month can put toward your debts.
3. Make more than the minimum payment — When paying off debt, make the minimum payment.
Go out of debt quickly.
To make a dent in your debt — you pay more than the minimum payment each month.
If you can’t afford to make more than the minimum payments, get help to get out of debt.
4. Consider a Debt Management Plan. A DMP is an option for people who can’t afford to make more than the minimum payments on their debts.
With a DMP, you work with a financial institution to plan to pay off your debts over time.