We see the history of how Americans have spiraled into debt. But we can’t spiral out of debt. Larry Burkett says, “You can slip into debt but you can’t slip out of debt.”
Being in debt can be stressful, and no matter what your circumstance it, if you have debt, you are obligated to pay it back.
Sometimes debt can be a result of overspending any time of year, or unintended consequence of too much holiday spending. There are many folks who get out of debt every single day, and they are doing this in a short period of time. To do this, you must have a plan!
We have to be intentional and make a plan. If you want to demolish debt, then you must come up with a plan of how to do so.
Here is a plan that you can follow.
5 Keys to Getting out of debt:
1. Make a decision to stop borrowing money!This may sound obvious, but if you want to get out of debt fast, you have to stop using debt to pay for your lifestyle. You can’t sign up for more credit cards, or finance another car, or charge new furniture. You have to stop acquiring new debts. This will enable you to focus on the debt you have and develop a plan to pay it off quickly.
2. Starter Emergency fund of $2000.
You might be thinking, “If I’m supposed to get out of debt, then can’t I just put that $2000 on my debt?” If you don’t have any money in the bank, and an emergency happens, then how will you pay for it? You don’t want to have to use debt or credit cards to take care of your emergency. An emergency fund is just that. It’s for emergencies, so if something needs repaired or replaced, you have the money to do so.
3. Create a budget!
A budget is telling your money what you want it to do.
This will help you track your income and your expenses so you an get out of debt in a short period of time.
This will reveal if you have money left over or if you have a negative.
If you have money left over after all your bills, expenses are paid, then make sure you apply that “extra” money to the emergency fund until it’s funded with $2000. If you have the emergency fund in place, then apply that extra cash to your debts.
If you are in the negative, then you’re going to need to cut some of your expenses where you can and potentially work an extra job until you can afford to work just one job.
Organize your debts.
Karen is a Master Financial Coach, Public Speaker, Entrepreneur, and Author who has coached people with a variety of money issues: from just $500 in debt to $800,000 in debt. She has coached folks with up to 86 credit cards and taught them how to pay down and pay off those credit cards in record time.
Karen’s mission is to inspire others to rid themselves of debt and build wealth. She encourages others to break the shackles of debt and gives valuable insight into building wealth so that can experience financial freedom!
Karen Ford’s #1 Amazon Best Selling Book “Money Matters” is a discovery for many.
She is an avid real estate investor, who enjoys buying, selling, and flipping properties. She has even bought properties for as little as $10 and turned a few dollars into thousands!