Be rid of your debt fast: 5 Essential steps that will get you there
Looking for a way to get rid of that most dredged debt fast? Here are 5 essential steps you can take today to chip away at that debt and have it paid off fast.
Money management is not something that was discussed in family and circle of friends. In reality it was not something I really thought about. After graduating from university, I had accumulated a student loan, a car loan, and credit card debt, totalling approximately $25,000. I felt like I was drowning in debt and did not know how I was going to make ends meet. So, I began researching ways to pay off debt. I began learning about the benefits of paying off debt, started applying the concepts, and making paying off my debt a priority. Within a year I was finally debt free. The weight had finally lifted! And I felt completely free.
If you want find yourself wanting to get out of debt quickly, to have a clean slate, a fresh start, then this article is for you. I will share with you 5 essential steps you must take to help pay off your debt quickly.
Step 1: Determining how much you actually owe
This first step is the most important. You need to know how much you owe.
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- Do you have a student loan?
- Do you have a car loan?
- Do you have credit card debt? Do you have multiple credit cards?
- Do you have any other outstanding bills that you haven’t paid? Have any of them gone to collections? Try checking your credit report to make sure you don’t owe anything else, as you do not want any surprises.
I know this can be challenging, and you probably rather not know. But, if you want to tackle your debt, you need to know where you stand.
Step 2: Make a budget
If you want to get out of debt fast, you have to make a budget. This is your plan to help you reach your goal. To create an effective budget you need to:
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- first, know how much you owe,
- second, have a good understanding of your income, your bills, your expenses,
- and third, make your budget account for every single dollar you spend.
This is the only way you will actually be able to pay off your debt quickly, you have to know where every single dollar is going. You need to have to have a plan for your money even before you get it. Where will it go the second you get it? Once you have your budget, this is your personalized plan. Stick to it!
Step 3: Decrease your spending
I know, I know. There is only so much you can do to decrease your spending. But here are some easy ways for you to cut down on your expenses:
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- Are you actually using your gym membership?
- Are there any streaming services you are not using?
- Make your coffee at home and bring it in a tumbler.
- Make your meals at home and bring your lunch to work.
- Consider getting a roommate if you are on your own.
- Can you move back home? Or live with a family member?
- As you cut out the things that are not necessary you will start to see how much extra cash you have at the end of the month to put towards your debt.
Step 4: Increase your income
This one might not be so obvious, but you will have to get creative to find ways to increase your income. Let me give you a few ideas on how you can do that:
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- Pick up a part-time job
- Start a side hustle
- Sell some household items you are no longer using
- Join a local focus group
- Are you an expert in something? Do you have any special services you can offer?
You need to find something that works best for you. And keep in mind you are doing this to pay off your debt fast.
Step 5: Educate yourself
You want to always be consume content that is going to get you motivated to keep going. So for me, I read Financial Fitness: The Offense, Defence, and Playing Field of Personal Finance by Chris Brady and Orrin Woodward. It was a total game changer and got me so excited that I could not wait to get started. Here are a few other sources of content you may want to check out:
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- Rich Dad, Poor Dad by Robert Kiyosaki
- Financial Fitness: The Offense, Defence, and Playing Field of Personal Finance by Chris Brady and Orrin Woodward.
- The Total Money Maker by Dave Ramsey
- His and Her Money Show Podcast by Talaat and Tai McNeely
Honestly, there is so much free content available to you. Just try to learn as much as you can. If you want to pay off your debt fast, you have to stay motivated. Reading about paying off debt and hearing other people’s success stories will definitely get you excited to increasing your net worth.
When you are working on paying off your debt quickly, you will need to find ways to stay motivated. Because, I can guarantee you are going to encounter a lot of resistance. You will be tempted to go to lunch with your colleagues. You will be asked to go to the movies with friends. You will walk the mall and see that shirt you have been looking at for the past month. But if you take the time to focus on your financial goals and apply these 5 essential steps, you will be in a position to make better decisions and budget for some fun. It is that simple. You got this!
