The process of learning how to get debt free can seem daunting. Mounds of debts that seem insurmountable have a tendency to cause depression and even fear. Well, don’t worry. I’m here to teach you how you can get debt free, and it’s simpler than you might think. Here are a few pointers to get you started.
1. Stop The Spending
Obviously, if you want to get debt free, then you must stop increasing the amount that you owe. The only way to do this is to reduce the amount that you spend. This is perhaps the hardest part of getting out of debt because it will require you to change your daily habits. You have to learn to eat leftovers or bag a lunch to work. You have to learn to tell your kids “no”, and, (even harder!) to tell yourself “no”.
2. Set A Goal
The best advice I have for those who want to change their habits to help them get out of debt is to set a goal, and then keep your eye on it. When you are tempted to spend, it is easier to deny yourself if you remember what you are working for, and deciding what you want more. If you want to get out of debt, you have to want it more than anything else. Give yourself a spending choice: I can buy X, or I can get out of debt. Then you simply have to choose.
3. Focus Your Money’s Power
Think of your money as a military army. If you bring all your troops and weapons to bear on a small area, then you are likely to destroy your enemy more quickly, and with fewer losses. The same applies with debt elimination. If you want to get debt free, then you are going to have to focus on one debt at a time. If you spread yourself thin and try to eliminate all your debts simultaneously, then you will likely tire before you have even made a dent. Rather, focus your free cash on one debt at a time, and once that one is eliminated, then move on to the next one. As you take your debts out one at a time, you actually increase your ability to eliminate the other debts. This process is called a ‘Debt Snowball’, and it is incredibly powerful.
4. Don’t Give Up
Let me quickly illustrate the power of snowballing your debt. A family that owes $35,000 on a variety of credit cards, automobiles, and student loans can get debt free in less than three years without spending a penny more than they already are. If they can find some extra money to apply towards their debt elimination plan, they can get debt free even more quickly. So don’t give up. It can be done, and fairly quickly too. Keep working towards your goal and you’ll get there. Good luck.