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Are you tired of your debt weighing you down? Do you feel like you’ll never get ahead on your debt payments?
That’s a massive financial burden. Whether your debt consists of a mortgage, credit cards, car loans, or student loans, it’s time to get out of debt fast.
Stop letting your debt control your life. This guide is going to help you live the debt-free life you deserve.
How To Become Debt Free
Are you ready to become debt-free?
After all, that is why you are here right?
Before starting your journey to becoming completely debt-free, we highly recommend starting a small emergency fund, for when life throws you a curve ball.
Having an emergency fund set aside will allow you to smooth out those small bumps in the road you’ll hit during your debt-free journey.
We recommend keeping your emergency fund in a high yield savings account that is insured by FDIC which means your savings will grow each and every month.
Best part of money in an online savings account is that you can’t just run to the bank, and take it out. After all, an emergency is for just that, emergencies.
Most importantly, don’t let your money sit in an average savings account, at a local bank. It’s not doing you any good there.
Follow the steps below, and you’ll be able to pay off your debt fast and achieve the debt-free life you have always dreaming of.
Organize Your Debt
When it comes to getting out of debt, the first place you need to start is by determining how much money you owe and who you owe it to. In order for you to pay off your debt, you need to have a clear picture of your financial situation.
Develop A Plan Of Attack To Get Out Of Debt
Now that you have your debts listed out, it’s time to start forming a plan of attack. The word attack because that’s what you’re going to do!! You’re going to get motivated, create a solid plan, and attack your debt until it’s gone.
Debt Snowball
There are many ways to pay off debt. I’m going to share my favorite method, the debt snowball.
The debt snowball is a very simple concept for paying off debt.
You listed out all of your debts. To get started with your debt snowball, reorganize your list of debts from the smallest debt to the largest.
You’re going to attack the smallest debt first.
Use some of the methods listed a little further down in this post to help you pay off that debt.
Once the smallest debt is paid off, you’re going to use the money that would have gone towards that monthly payment to pay off the next smallest debt.
Every time you pay off another chunk of your debt, you use the money that would have been the monthly payment to pay off the next debt on your list.
The reason it’s called the Debt Snowball is that you compound your payments as you pay off more and more debt. This method works, and I highly recommend trying it.
Debt Avalanche
Another popular method for tackling your debt is called the debt avalanche. In this method, you tackle the debt with the highest interest rate.
High-interest rates can make paying off debt really difficult. If you’re racking up tons of interest on a loan, it might be wise to attack that debt first.
Both the debt snowball and debt avalanche are effective ways to pay off your debt. Make sure you evaluate both methods and choose the best one for your situation when you create your plan for paying off debt.
Don’t Try To Reinvent The Wheel
When it comes to getting out of debt, there are many different ways to do it. The one thing that I want to stress is not to try and reinvent the wheel.
There are plenty of successful ways out there to reach your goal; don’t go trying to create a new method. Find a process that’s proven to work and use that. Maybe you want to use the debt snowball, or perhaps you want to use the debt avalanche, whatever it is.
Get Out Of Debt With A Budget
The single most important tool we have used to pay off debt and remain debt-free is a budget. That’s right, creating a simple budget has helped us pay off all of our debt and has enabled us to continue to live a debt free life.
Creating a budget will help you save more money each month, and allow you to start paying off your debt at a faster pace.
Develop Frugal Habits
Now I’m sure the definition changes a little from person to person but frugal living is simply being smart with your money. Choosing to live below your means and being content with what you already have.
When you live a frugal life, you’ll save more money. The goal of frugal living should be to reduce your expenses to a minimum, that’s when you’re going to do the most damage on that mountain of debt.
The bottom line is if you want to pay off your debt fast, you have to embrace the frugal life. Here’s how you can do that.
Side Hustle Your Way Out Of Debt
The quickest way to pay off your debt fast is to make more money! With more money coming in you’ll be able to pay down your debt faster.
Making more money at your current job might not be a possibility right now, but that doesn’t mean you can’t start a SIDE HUSTLE of your own!
This Content has originally written by David and Cassie and published on February 18, 2020. No Copyright/IPR breach is intended.
