What Is the Best Way to Get Out of Debt?

The best way to avoid debt is not to get in there in the first place. But once you’re in, it’s not as difficult and it’s not as stressful as most people really make it. Getting out of debt can be as easy as getting in debt, actually easier. To get in debt you had no plan whatsoever you just spend. To get out of debt you need a plan. So let’s assume you don’t have anybody breaking down your doors and you’ve got time thinking this out. You don’t necessarily need to pay companies to help you do this. All it takes is simple common sense. What you need to do is sit down with a regular pad and a pen or pencil and simply write down everyone you owe money to.

Then next to that, write down how much do I owe them. And after that how much am I committed monthly to pay them. Another piece of advice or another excuse me another piece of knowledge I like to know is what’s my interest rate that I’m paying for use of that money. Once I know all these, it’s very easy to come up with a plan. Sometimes it might be better to start what I call the “feel good plan”. Let’s look at the lowest amount of money I owe. Let me pay that one off as quickly as I can so I can feel good that my plan is working. But let’s just say you add up all your bills and the total monthly outlay, let’s say a thousand dollars. The ideal way to get out the fastest is to say, “Okay I’m going to add another hundred dollars a month to my thousand and I’m going to attack either my lowest bill or my highest interest which is my highest cost one.

Simply make that payment plus the extra 10%, hundred, whatever you can afford. Continue to make payments until that’s gone. After that, take all that money, don’t cheat, take all that money and roll on to the next one. Most people can get out of debt within 3-5 years without changing or dramatically affecting their lifestyle whatsoever. All you really do have to understand, you either have to cut spending or increase your income. Those are the two easiest ways to get out of debt. It’s not that hard. Take a breath. Sit down. Do a little thinking. And then take action. And as always, seek outside counsel whenever possible from company such as ours.