The Get Out Of Debt plan: Consider it for you!
If your self-assessment has you thinking that debt has too big a control on your life, then maybe instead of buying a car and adding an auto loan to your debt load, you should seriously consider starting a Get Out Of Debt Plan. While there are many different methods and sources for getting free of debt, as well as debt experts such as Dave Ramsey (www.daveramsey.com) and Suze Orman (www.suzeorman.com) that can sell you programs to help you get free from debt, in the end, debt freedom is all about what you do (or don’t do).
A good Get Out Of Debt plan isn’t that hard or complicated to implement. For most people, all that’s needed is a little hard work, some discipline, and the willingness to change some habits. The basic steps and things you need to do to implement your plan are as follows and are detailed thoroughly below:
- List your debts and interest rates
- Compile that list into a single list prioritized by interest rate
- Attack one debt at a time as aggressively as you can
- Watch your expenses… little ones add up
- Find a consolidation loan if you are disciplined
- Put together a budget and stick to it
- Use the 10 FREE online budgeting and money management tools we provide below!
- Find ways to save and make more money
- Check out the 10 great ways to make more money
- Pay more on your debt whenever you can
- Consider using a consolidation card if you have the discipline
- Consider debt counseling and perhaps debt settlement
- Find the answers to frequently asked questions about debt counseling and credit repair
- Consider debt settlement as an option… but be careful
- Know the four major problems with debt settlement
- Check out the consumer guide to debt collection: Frequently asked questions
List your debts and interest rates
You can’t get a plan together without understanding what you are planning to do. The first step in any debt-freedom plan is to know everything you owe. That means compiling a list of all your debts along with their interest rates and balances. The list should include:
- Mortgage debt
- Auto loans
- Credit cards
- Student loans
- Personal loans
- Payday/Cash Advance loans
- Medical bills
Compile the lists of your debts
Put all your debts together and list the name of the debt, the amount still owed on the debt, and the interest rate you are being charged to borrow the money.
You should end up with a list that looks something like this:
|Debt Description||Loan Amount||Interest Rate|
|Credit Card One||$14,000||21%|
|Credit Card Two||$5,000||14%|
|Car Loan One||$8,500||8%|
|Car Loan Two||$14,000||7.5%|
|Grandma Personal Loan||$1,500||2%|
Remember that your mortgage is almost always the debt you will eliminate last. In addition, there are very good experts on both sides of the argument as to whether it is a good idea or not to pay off your home mortgage early. It’s a good idea to review the differing philosophies if you are thinking about paying off your mortgage early.