Get Out of Debt

Working to Get Out of Debt
If we have learned nothing else over the last couple of years we should have learned that being in debt is killing us. Now more than ever people are buckling down to get out of debt. Unfortunately, it is also now harder than ever to do just that. That does not mean it is impossible however, just that it will take more determination and grit than it would have a few short years ago.
Bill Pay
You will never be able to get out of debt if your bills are out of control. There it is, blunt and to the point. Your everyday bills have to be paid on time and with money left over if you want any hope at all to reduce your overall debt.
First figure out what your monthly debt is compared to your income. Take a pen and paper and figure the cost of the things you cannot live without, like lights, water and food. These are your essentials, anything above that must be considered secondary. To get out of debt you almost take on a war mentality, where bills are the enemy to be dispatched as quickly as possible!
If your income has come up short when compared to your monthly essentials, you are in serious trouble. But at least you know the trouble you are in and that is the first step to doing something about it. You cannot fix a problem if you do not know it exists. This may sound simple, but I assure you it is quite possible to live month to month and not know how much of your paycheck you should set aside.
Increase Income or Reduce Debt
These are your only two options. There is no other way around it you either need more money or fewer bills and optimally you want a little of both. This section of the plan will depend on what you will or will not do. For instance if you feel a part time job at a fast food restaurant is beneath you will not use that avenue to increase your income. Here are a few options for increasing income and decreasing bills to get out of debt:
• Take second job
• Babysit on your off hours
• Sell the boat in the back yard and pay off a bill with the proceeds
• Cut back your cable or satellite service
• Do away with a phone line (most people have already converted to cell anyway)
• Turn down the thermostat on heat and water heater
• Take on more hours at work
Some of these measures are extreme, however as we have discussed to get out of debt you must push the envelope.
Debt Reduction
When you have your basic essentials under control, you now must look at reducing your debt load. This is where you concentrate on credit cards, personal loans and anything you have financed.
Where you can sell things, you have financed to get out of debt. For example if you have a four-wheeler, three cars and a boat all financed it is time to cut down. To get out of debt you have to look at every purchase differently and remove the non-essentials until you are on better footing.
Okay, now that you have trimmed the fat as much as possible it is time to roll up your sleeves and get serious about getting out of debt. Calculate how much extra money you have been able to squeeze out of your income and make extra payments on your smallest debt.
Add payments until the debt is cleared, then take your payment plus the extra, and apply it to the next debt. This will snowball after a time and before you know it, you will enjoy the freedom that comes from being debt free.
The path to get out of debt can be a long arduous one filled with peril and temptations. Nevertheless, stick with it and if you fall along the way simply get back up and try again, the dividends are worth it.