Maybe you're in debt up to your eyeballs. You feel stressed out these payments just keep coming every single month.
Today we're gonna talk about how to get out of debt and how to be financially free because that's the goal right the goal is not fancy expensive cars and fancy expensive houses. The goal is small many are goals.
Welcome go ahead and like and subscribe because we're gonna get you out of debt and all I'm asking for is a quick little like a little subscribe maybe hit the bell as you feeling frisky so let's get into this all right.
This is extremely important because so many people are in debt trust me you are not alone acceptance is the first step.
1. Acceptance
Now I've been there I feel like everybody's been there a lot of times you don't even want to look at the bill you don't even want to open the mail you don't want to check your statements you don't want the emails but you have to look at that diamond in the face.
If you've reached a point where you didn't even want to take a look at it that means you definitely need to take a look at it. Make sure you accept it and understand there's a problem that you need to fix and that you can fix.
2. Knowledge is Power
So step 2 is understanding that knowledge is power.
Do you know how much you owe?
Do you know your interest rates do know?
How long it will take you to pay things off?
If the answer is no.
What have you been doing?
Figure out these things. The more real it becomes to you the more sugar you will be and the more determined you'll be to pay it off. So go figure out how much exactly do you owe? How much interest do you pay a month?
Because remember you're making payments the same payment every single month but how much is going towards your entry and what's going towards your principal is the balance even getting paid down sometimes you're in a situation where you only paying interest only.
So make sure you're not doing that you'll be able to find out on your statement. I believe it will break down what you're paying and interest was been applied to the principal and if not.
mint.com definitely breaks it down for you and it'll show you all your finance charges so you can check that out too.
What's the interest rate is it a fixed rate does. it escalates. Have you found that your credit card?
May be started at 15% but now you're at 22?
Those are important things to know because you have options you don't have to keep yourself stuck into a high-interest rate credit card.
For example, you can transfer your balances to save some money. So that really takes on that one and make sure you're not paying it up seeing about. How long will take for you to pay it off I mean if you see that the payment you making now you won't be done paying for another 15 years that might scare you?
Definitely see exactly how long these payments are going to be lasting for seeing how long it will take to pay it off who really put things into perspective for you and then from there you can kind of make a plan of what you actually want that number to be.
How to Pay the Debt Off
What's the strategy crystal we've accepted it already, we're super knowledgeable, we know exactly how much we owe, we know the interest rate, we know everything we need to know about our debt. Now let's pay it off.
These multiple strategies depending on what your personality type is a bit of type really satisfactory and just knowing you're saving more money than pay off your highest interest rates first. Though to cost you the most.
As quickly as we can get rid of those the better this will allow you to save more money because you're tackling those higher interest rates and you're gonna be paying that down. What you can do? is you can keep minimum payments on all your other debt and just tackle that one and put the most money on to that debt.
Then when that is paid off you don't spend that money. You put it on to your next day next loan or the next credit card and we're gonna just keep that going until this payoff.
If you're somebody who gets more satisfaction than actually seeing things check off of a list maybe you have private room pieces of debt and if you get rid of one or motivate you to get rid of the others.
If that's the case that I would suggest that you can pay off your smaller balances first that way you gotta get done faster and then you'll actually feel like you're making a difference right because things are getting paid down your payments are reducing.
In that situation, you will double up on that smaller balance and keep tackling that until that's done and then you'll take whatever you're paying on there and apply it to your next payment. ]
What sacrifices are you gonna be making?
You know do you want to live with your parents or live with a roommate to get some extra income. How bad do you want this once you know how long you want to be this off.
For let's say if you have $100,000 of debt and you want to get it paid off in 10 years. Well quick and easy math will tell you you have $10,000 to pay down every single year that's keeping it clean.
I was gonna be interest and things that you have to consider but let's just keep it easy so what do you have to do to get that 10,000 down.
Your affirmation that your budget is on point and that you're really disciplined and then you'll have to figure out what can I get rid of.
Can I have a roommate? Can I live with my parents? Can I maybe cancel some of my Netflix and whatever subscriptions? What is it going to take what sacrifices are you going to make?
Now so that you don't have to deal with this cloud in the future are we gonna have long-term success because keeping in mind that the debt is really caused by poor spending habits.
Manage Your Budget
You have to reverse those spending habits you have to manage a budget you have to spend less than once you earn you have.
To make sure you're actively saving automate your savings I have plenty of articles on my channel already that go into debt about managing your money better than what to avoid so please make sure you check that out. I will have many more articles on paying down debt.
I'm gonna promise anything in the comments talks to me I want to hear from you whether your kid dead strategies how fast you want to pay off your debt let me know and as always keep money up.
