Want to Get Out of Debt?
Face up, ‘fess up and get out of debt.
There are a lot of people walking around with the debt monkey on their backs. A lot of people. And some of them can’t understand how they got roped into carrying the little beastie around with them. All of them wish they could shake the bugger off. So, why don’t they?
Answer seems easy enough, doesn’t it? Just pay off the debt.
But wait. To do that, a body would have to admit to having debt and there are people who haven’t yet ‘fessed up to how much they owe. Some even pull out the wide eyes and Betty-Boop lips as they announce, I don’t know how much I owe.
Really? You don’t know how much you owe? You’re just lucky that you’re not in the room with me, ‘cos I’d give you a good smack!
I assume, because you’re reading this, you’re interested in getting the monkey off your back. To do that, you have to do exactly what I say…
- Start by gathering every last statement you have for your debt. You’ll need your most recent statements to get a clear picture of what’s going on. If you’ve dumped them all, just wait ’til your next statements arrive and collect them all in one place.
• lines of credit
• loans (for your wedding, furniture, whatever)
• buy-now-pay-later loans (even if they haven’t come due yet)
• outstanding bills (utilities, phone bills, cell phone,)
• spousal / child support in arrears
• loans from friends
• pay advance loans (from stores)
• pay advances from your employer
(*Hey, I built this worksheet and it’ll give you good guidance, but if you want a perfect amount, check the web for debt repayment calculators. The point of this exercise is for you to see your reality and come to terms with what you’re going to do about it.)
a. Get your interest rate down. $5,000 on a credit card charging 25% will cost you $521 a month to repay in one year. Get your interest down to 12% using a consolidation loan and you’ll pay only $467 a month on that balance. Transfer your balance to your personal line of credit and pay just 6.5% and it’ll only cost you $444 a month to pay off that $5,000 in one year. Better yet, transfer your balance to a credit card with an introductory interest rate of just 2.5% and it’ll cost you $427 a month. There, you just saved $100.
b. Find a way to trim your budget so you can put more money towards your debt repayment. Use Gail’s Interactive Budget Worksheet to create a budget that will let you increase your debt repayment amount. Com’on now, you can trim another ten percent. You can do it! I know you can.
c. Make more money. Yes, you may have to find a second job until you’ve made a dent in your debt. It’ll be worth it to get the monkey off your back, I promise.
Congratulations! You’re making progress. I’m proud of you. Stick with it and before you know it you’ll be debt free and light of step.