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Climb Out of Debt

Climb out of debt, and stay debt-free in the future so that you are able to pay yourself instead of others every month. Here’s how to do that magic.

Climb out of debt, and then be able to stay debt-free in the future. Your wildest dreams can come true if you can pay yourself rather than others each month. Debt can drag you into scary places, to fear and depression. This is where you do not want to go! But, this happens all the time to all kinds of people. However, there is an answer to the despair of the debt pit. And you can climb out of debt!

What Should I Do First to Climb Out of Debt?

The first thing you must do is create a monthly spreadsheet that shows your income sources, and amounts, and every credit account, debit, or a bill that you need to pay monthly, including living expenses.

Here are some items to include for living expenses:

1. Rent or mortgage payment

2. Utilities

3. Food

4. Vehicle payments

5. Insurance

6. Gasoline allowance

7. School expenses

8. Medical

9. Savings

10. Animal expenses if you have a pet or pet

11.Charity donations

12. Entertainment

Under bills and credit accounts put everything you owe:

1. Credit cards

2.Store credit accounts

3.Bank card accounts

4.Finance company accounts

5.Payday loan accounts

6.School loans

7.Any other promised payments

When you create your spreadsheet, make enough rows across for every expense item. Make enough columns for the following entries:

1.Item

2.Due Date

3.Total Balance

4.Minimum Payment

5.Interest Rate

6.Finance Charge

For items that recur weekly, such as food and gasoline, make at least four duplicate entries with the monthly amounts divided into weekly amounts. Across the bottom of the spreadsheet, include a row titled “Totals” where you will show totals due for all payment due accounts and for all minimum payments. Use the minimum payments due total to see if you will have enough income to pay them all.

To organize your “climb out of debt” spreadsheet, use the top rows for your living expenses items. Then add in the bills and credit accounts according to the due dates, with the earliest due first. Use as many pieces of paper as needed. When finished, you should be able to lay out all the sheets and see your entire monthly budget.

How Can I Tell if I Have a Cash Flow Problem?

If the total of all the minimum payments due exceeds your income totals, you have a cash flow problem. If there is excess income, apply that to your debt target. If you see that you need more income, act immediately to find more income. Look for extra work, or sell something. You can have a yard sale, auction items online, sell at a consignment store, or sell at a pawn shop. Extra work can be in the form of an additional job or part-time job, freelance work, or odd jobs. Think creatively!Climb Out of Debt

Once you have full knowledge of your monthly budget, your map for success, and your income and expenses picture, you can begin to climb out of debt!

Show Me How to Climb Out of Debt

To climb out of debt, look at your credit accounts and all you owe to others. There are two ways to approach these debts. You can organize them by interest rates, paying off the ones with the highest interest rates first, or you can organize them by the total balance due, and pay off the smaller ones first. Once you get any of them paid off, take whatever payment you were making to that account and load it on top of what you have scheduled for the next target bill. Continue this process until all are paid off. As you pay off bills, you will be making higher payments on each successive bill, which will speed up the whole process. If you just make minimum payments, you will be paying on your bills for decades, and paying about three to four times the original amounts.

Once your credit accounts are paid off, move everything towards any vehicle payment you have, and then on to your home mortgage. Eventually, you will climb out of debt and be debt-free! What an amazing position to be in! Then, your key to debt-free living is to stay debt-free.

How Do I Avoid Paying Interest?

Save up for items and always pay cash. You can keep a few of your credit accounts open to using for dinner occasionally and then pay in full monthly. This will keep your credit record and score high. Truly, cash is king, and you cannot lose by being debt-free. When you no longer have to pay others interest and payments for items you may not even still have, you get the full benefit of your income. Instead of working years into the future for others, you will be saving up for your own enjoyment. A tremendous weight will be lifted!

Where Can I Learn More?

There are a few well-known personalities who offer wonderful ideas for using money and living debt-free. Consult DaveRamsey.com and SuzeOrman.com for more information on how you can climb out of debt.