If you don’t know where to start when dealing with debt, keep reading! Being in debt can feel like you’re stuck in a cycle, but following a plan can help make it easier to get out.
- Figure out your financial situation.
Make a list of all your debts: include all your credit cards, loans, anything you borrowed from a family member or friend. Then take into account all your income. This can be from a 9-5 job, remittances and dividends from stocks.
- STOP incurring bad debt, especially high interest debt
If you keep using your credit cards without paying them off, you’re not going to get out of debt. If your debt is going to be used to propel you forward and get out of debt, then you can consider it. Good debt is things like mortgages or a business loan.
- Track your spending
Take some time to track all your spending. This way you can see exactly where your money is going and see where you can or need to cut back.
- Use a debt repayment calculator
Use this calculator to see how much you need to pay back each month in order to clear your debt in a certain amount of time. You can get access to one in my Debt Do Over course.
- Figure out your debt repayment strategy
You can use methods like the debt avalanche or debt snowball method or a combination of the two. Once you know the strategy, you can start to get to work.
- Stick to the plan!
The plan won’t work if you don’t stick to it! You have to make your budget, make your plan and stick to it!