There are all sorts of folks out there who want to tell you how to get out of debt, and how to do it fast. Some of them want you to declare bankruptcy. Some of them want you to use their credit counseling or credit repair service. Some of them want to tell you that you need to take all of your debt and consolidate it into a personal loan that has a lower rate of interest.
Some of these plans work. Some don’t. Everyone’s situation is, to say the least, different. Still, there is a foolproof process that you can use to get out of debt:
Pay your debt off.
It sounds simple, of course, and it’s much easier to say it (or type it in bold letters) than it is to do it in the real world. Still, that’s really what’s at the heart of getting out of debt: paying it off.
If you have at least enough money to meet your basic needs and some money left over each month, you’re ahead of the game. If you don’t, you need to figure out a way to reduce your expenses, increase your income, or both.
If you don’t have enough money coming in, you can’t pay off your debt.
That’s the problem that many people face. They want to pay off their debt, but they don’t have money enough coming in to actually do it. To really pay off your debt for good, you need to increase your excess income.
Now, reducing expenses can go a long way toward increasing your excess income, of course. If you can be more frugal, you won’t have to earn as much extra money in order to make things balance out.
You need to do more than just make things balance out, however. You need enough income to snowball your debt away. What does that mean, exactly?
You get rid of debt by paying it off, consistently, every month.
Even when you’ve paid off a credit card, you don’t pay less on your debts. You take the money you were sending to that credit card and you send it to the next credit card, or to a personal loan. Your debt payments, in effect, create a “snowball” that will have you out of debt in no time at all.
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