by Bo, March 13, 2014
Paying off debt may seem like a pipe dream but there are people every day that are making this a goal and they are successful too! The good news is you can do it too and capture that amazing feeling of freedom that comes from being debt free. How do they do it when it seems like an overwhelming task?
Here are some tips you can use so you can learn how to pay off debt and find the freedom you have been dreaming about.
1) Cut expenses! The first step is to take a hard look at the waste in your budget or checkbook. Really analyze your expenses and outgoing monies for the past 2-3 months for a crystal clear look at where you can trim the fat. Once you have identified the leaks, plug them up! Cut services you don’t really need. Trim down on other expenses where you can. Do you still have 2 phones or are you on an expensive calling plan? How many channels of TV do you really need?
2) Add Up The Savings! Once you know what you can adjust and remove from your outgoing money, figure out your savings and then identify where that money will go. List out all of your credit bills and debt so you know where you stand.
3) Start With the Lowest Bill First For most, starting with the smallest bill to pay off is the easiest. Roll in all that you have saved from cutting expenses and dedicate that additional amount to that bill. Do this until it is paid off. Then take that amount, add it to the other savings and start with the next bill.
4) Stick With it! It may be tempting to spend the “found” money on things that you need or want, but be frugal. Treating and rewarding yourself is great after a success, but don’t let it take over. Stick with the pay off plans and get rid of those bills. You can leave your home for last, but work on that too!
This process is not something that you can do in a matter of a year or two, in most cases, but it can be done and you can enjoy the feeling of being debt free too. If you want to speed up the process, look for a way to add more income to your budget by adding a second job, consulting or something similar, depending on your profession. Dedicate all extra income to the pay off pot and start saving as much as possible so you can become worry free about money!