How To Get Out of Debt in 2011
One of the most common resolutions for every new year is to get out of debt.
Yet, it seems to be a resolution that many fail to accomplish.
To get out of debt, there needs to be some sacrifice and also some commitment to a plan of action.
Most people that are in debt did not get there over night.
It is usually a process of spending (or borrowing) more than is earned.
Then, the debts are maintained by paying only the minimum amount necessary.
The problem with that is that the debt continues to accrue interest and the payments cover mostly the interest, and very little of the principal amount owed.
This is counter-productive as it leads to thousands of dollars being essentially tossed out the window.
To get out of debt in 2011, you will need to make some sacrifices.
They do not need to be drastic, but they do need to be conscientious decisions to change the current level of spending and thereby realizing "extra" money that can be better utilized.
On average, the majority of consumers spend way more than they need and in most cases, when there is a surplus of items, there is a likelihood of wasting those resources.
To change this, there is a process that needs to be put in to place.
Your first step in this process is to make a list of all expenditures.
This list should include those things that are necessary, and those that are not.
If you have trouble with this, you can go through a one or two week data gathering period, where you document everything you purchase and how much you spend.
Then, just project the amount for the remainder of the month to give you an estimate of what money you spend, and what you spend it on, during a one month period.
This list will serve as your guide to "finding" extra money.
Once you find areas that you can reduce expenses (such as packing lunch for work versus eating out every day), you should have a dollar amount to work with for the next step.
The next step will be to figure out the amounts of your bills and organize them from smallest to largest.
Your "found" money, combined with the current amount you pay for that bill will be your new monthly payment amount.
If you "found" an extra $100 from step one, add that to your monthly payment of $50 for bill number one.
You will be paying $150 to that bill until it is paid.
The third step is a step you will repeat until all debts are paid in full.
After bill number one is paid in full, you will take the $100 of 'extra' money plus the $50 you were paying for bill number one and add it to the payment for bill number two.
So, if you were paying $100 a month on bill number two, you would now be paying $250 until that bill is also paid in full.
You repeat this process until all debts are paid.
This process will take some time, as it did to incur the debts in the first place.
As you start paying your debts in full, you will no longer be paying interest on them and will have the peace of mind that comes with being on the road to financial freedom.
That, my friend, is priceless.
Yet, it seems to be a resolution that many fail to accomplish.
To get out of debt, there needs to be some sacrifice and also some commitment to a plan of action.
Most people that are in debt did not get there over night.
It is usually a process of spending (or borrowing) more than is earned.
Then, the debts are maintained by paying only the minimum amount necessary.
The problem with that is that the debt continues to accrue interest and the payments cover mostly the interest, and very little of the principal amount owed.
This is counter-productive as it leads to thousands of dollars being essentially tossed out the window.
To get out of debt in 2011, you will need to make some sacrifices.
They do not need to be drastic, but they do need to be conscientious decisions to change the current level of spending and thereby realizing "extra" money that can be better utilized.
On average, the majority of consumers spend way more than they need and in most cases, when there is a surplus of items, there is a likelihood of wasting those resources.
To change this, there is a process that needs to be put in to place.
Your first step in this process is to make a list of all expenditures.
This list should include those things that are necessary, and those that are not.
If you have trouble with this, you can go through a one or two week data gathering period, where you document everything you purchase and how much you spend.
Then, just project the amount for the remainder of the month to give you an estimate of what money you spend, and what you spend it on, during a one month period.
This list will serve as your guide to "finding" extra money.
Once you find areas that you can reduce expenses (such as packing lunch for work versus eating out every day), you should have a dollar amount to work with for the next step.
The next step will be to figure out the amounts of your bills and organize them from smallest to largest.
Your "found" money, combined with the current amount you pay for that bill will be your new monthly payment amount.
If you "found" an extra $100 from step one, add that to your monthly payment of $50 for bill number one.
You will be paying $150 to that bill until it is paid.
The third step is a step you will repeat until all debts are paid in full.
After bill number one is paid in full, you will take the $100 of 'extra' money plus the $50 you were paying for bill number one and add it to the payment for bill number two.
So, if you were paying $100 a month on bill number two, you would now be paying $250 until that bill is also paid in full.
You repeat this process until all debts are paid.
This process will take some time, as it did to incur the debts in the first place.
As you start paying your debts in full, you will no longer be paying interest on them and will have the peace of mind that comes with being on the road to financial freedom.
That, my friend, is priceless.