Gather Little by Little

How to be debt free is a question I get asked often via email. The process of getting of out debt is easy…but actually doing it is hard. See, getting into debt is easy. It only takes a few minutes to make a $5,000 purchase on a credit card. Paying it back though can take years.

In debt and want to get out? Here’s how:

1. Commit yourself to paying off your debt. Make it the most important thing in your financial journey. Swear that until you pay off your debt, you won’t buy anything you don’t need.
2. Recognize that you are the reason you’re in debt. Find the closest mirror, look yourself in the eye and say “You are the reason I’m in debt. Your bad habits of the past have gotten me where I am today. I can’t change the past, but I can change the future.”  Don’t look back, don’t kick yourself, what’s done is done. Just recognize you were the problem, but now you’re going to be the solution. We all make mistakes, just don’t make the same one’s twice.
3. Stop going into debt. It does absolutely no good to start the process of getting out of debt if you continue to go into debt. If you don’t have the self discipline to stop it, than cut up and throw away your credit cards. Don’t feel bad about this, I didn’t have the self discipline either, so I cut up my cards. I haven’t used a credit card for more than 2 years. I don’t miss them one bit.
4. Control your money. Start living on a budget. Cap and control your spending, and put all available money towards paying your debt. This may involve stopping your saving, stopping your 401k contribution for a while, skipping vacations, no longer eating out, etc, etc. Do whatever it takes to put as much money as you can towards paying off your debt.
5. Start a debt snowball. The most powerful technique for paying off debt is a debt snowball. A debt snowball places all of your debt in order, and helps you attack one debt at a time. It then takes the payment from that debt and adds it to the minimum payment on the next debt and so on down the line.

That’s it. The process is very simple, but it won’t be easy. Getting out of debt will take time, mostly likely a few years or even longer. It will be tough to live on a small budget, it will be tough not to buy things. Unexpected things will come up, and detour your progress. These are all normal. But don’t give up, stay committed, stay focused and you will one day be out of debt.

I am now debt free, expect for the house. 2 years ago I never thought I would be. I had more than $60,000 in debt between credit cards, car loans, and RV loan, and home equity loan. I sold stuff, did everything I could to increase my income, and cut corners like crazy. It was hard, but now that I am here, it worth it. Just the stress of the debt being gone is worth it. Well what are you waiting for??? Go get out of debt!

author: Larry

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