If you are like most Americans today, you are buried in debt. You might be suffering from an ever increasing amount of credit card debt that doesn’t seem to decrease, even though you are paying extra every month on your bills. You also might be suffering from an increasing mortgage payment from an Adjustable Rate Mortgage that you got a few years ago, when the deal looked just to good to pass up. Or you could be someone struggling with several student loans that also keep increasing.
Getting out of debt is not an easy or quick thing to do, but getting into debt didn’t happen overnight, either. The first thing you need to do is get all of your bills and paperwork in order. Face reality and bring everything to the table. Don’t leave a few bills hidden in the desk. Bring them all out and organize them. Now for the fun part, get out a big pair of scissors and cut up most of those cards. Leave at least 1 major card for emergencies only. Do not close out the accounts, but cut up the cards so you won’t be tempted to use them on frivolous items.
Next, make a chart of each bill and how much you owe on each bill. You should also note the interest rate that you are paying on each credit card, so you know which ones to tackle first. Most of the time you will want to pay off the highest credit card interest rate first. The exception to that rule would be if you only owed a small amount on one of the cards. It would be best to get that small card paid off and out of your debt portfolio.
Also on your chart, you will want to enter your monthly charges that you pay to run your household. Those would include mortgage, car payments, student loans, electric, phone, water, cable, food, gas, etc. Go through your checkbook as a reminder of those monthly bills. Start analyzing which bills are important, and which can be eliminated. Cut out the fat and keep your bills lean.
If you have no extra income to start paying off your bills, you will want to declutter your house and get ready for a huge garage sale, where you can sell off all of those items that are lying around collecting dust. Don’t forget about the garage and attic, either. This is a great way to bring in hundreds or thousands of dollars in a weekend. Make sure you take every penny from the sale and apply it to those credit card debts.
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