How to Get Debt Free

To be real honest with you developing and keeping up with a budget is a real challenge to most people including myself. If you are in business for yourself or work for someone that requires you to make a budget for your department you know how important it is. Everyone should have a budget, including you, and is a must for anyone wanting to get debt free. It is not hard to develop a budget but the real challenge lies in keeping up with your spending to the degree that is required to keep an accurate budget, and that is exactly what you need to do. The biggest obstacle is “yourself”, whether it is procrastination, lack of knowledge or just don’t know where to start. You have to overcome “yourself”, and when this happens you have won the biggest battle on How to get Debt Free.

Let’s now examine the steps to creating a budget….

First thing you need to focus on is your income; write down your income (take home). This should include all of your income.

Next comes the expenses, the first group of expenses should be the essential expenses like house payment, utilities, insurance, healthcare and food, anything that are essential.

Next list your expenses that are luxuries like eating out (entertainment), gym memberships, subscriptions and etc. you know what your luxury items are so write them down…..everything….

Now list all of your credit card debt, by each card and list top to bottom by the interest rate you are paying. The higher the interest the sooner you want it paid off.

After you have everything compiled you need to take your essential expenses and subtract this number from your income. This amount will be the basis for your debt reduction. Now don’t cheat on this step by listing any of your non essential expenses in your essential bucket, this will only hurt you and your chances to get debt free. BE HONEST WITH YOURSELF!!

With the amount that you have left you will need to figure out your minimum amount of all credit card payments combined and subtract that amount, then with the remaining amount you will need to figure out how much is left to apply to the highest interest credit card. The more that you pay the faster it gets paid off. You have just created a Budget.

Now the next point is up to you…if you have to have any luxury item choose wisely with something that makes sense to keep, but remember you are trying to get out of debt here so you can’t keep them all. Make sure that you can apply maximum money to get rid of credit card debt then we will work on something else. This is How to get Debt Free.

Once the highest interest credit card is paid off then start on the next highest and so on. One important thing to remember is to NOT CHARGE ANYMORE ON YOUR CREDIT CARDS!!!!!