Debt-Free – How to Make it Your Reality
Do you dream of becoming debt-free? Does debt weigh you down and make you feel like you can’t manage your finances?
You aren’t alone, but the good news is there are ways to eliminate the debt and use your finances to achieve financial wellness rather than throwing money at high-interest costs for the rest of your life.
Here are some simple ways to get rid of your debt fast.
Create a Budget
You can’t get out of debt if you don’t have a budget. Create a plan that pays your bills on time and accounts for your extra money. The extra money should be used to pay your debts down, but you can't create a plan until you know how much money you have to pay your debts off.
Your budget doesn’t have to be anything fancy – just a record of your income and expenses, so you see where you stand.
Tally up your Debts
Do you even know how much debt you have? If you see a money coach or talk to anyone about your debts, they’ll first ask how much you have in debt.
You can create a debt payoff plan when you know how much debt you’re dealing with. If you aren’t sure, gather your statements and total them. This action isn’t meant to scare you or make you frustrated. Knowledge is the key to reaching financial wellness.
Take it Slow and Steady
Once you know where you stand, it’s time to start paying your debts off. This won’t happen overnight, though. It’s a case of slow and steady – consistency matters the most.
The simplest way to get started is to use the debt snowball method. Here’s how it works.
Order your debts in order of balance, smallest to largest
Record the minimum payment required for each debt and budget for it
Determine how much extra money you have to pay toward your debts
Add the extra money to the minimum amount of the first debt (the smallest debt)
Keep doing that until you pay off the first debt in full
Add the minimum payment plus the extra payment you made to the first debt and add it to the minimum amount of the following debt inline
Repeat the process until you are debt-free
The key to financial wellness is becoming debt-free. It won’t go away overnight, just like you didn’t create it overnight. But with consistent steps and dedication, you can get out of it.
If you’re having trouble seeing the forest through the trees, consider talking to a money coach. You’ll get insight into how much debt you have, how you can get out of it, and the accountability you need to make the most of your money.
Keeping debt long-term only eats away at your future financial goals, especially retirement. Find ways today to get out of debt so you can put your money to better use.