How to Pay Off Bills Without Bankruptcy or Bill Consolidation

Debt weighs you down, keeps you poor and prevents you from saving money for your future. Bankruptcy and bill consolidation are tools some people use to address debt, but both options come with drawbacks. Avoid the drawbacks and learn to manage your money and pay off debt on your own. Learn skills that keep you out of debt in the future and help you increase wealth and long-term financial stability. Avoid quick-fixes that will have a negative impact on your life and decide to take control of your finances yourself.

Instructions

1

Write down all of your debts and monthly bills. Leave nothing out, including the change you spend for your daily candy-bar fix or mocha latte.

2

List all income that comes into the household each month. This includes money from your job, as well as any disability, retirement or child-support checks.

3

Subtract your bills from your income in order to determine how much money you have to put towards your debt each month.

4

Put aside $1,000 in an emergency fund before you start paying bills off, if possible. This money will keep you from using credit cards in an emergency, according to personal finance guru Dave Ramsey.

5

Eliminate all extra expenses from your budget. Cut out satellite television, cell phone bills, vending-machine money and anything else you do not need to survive.

6

Bring in extra money by selling personal items that you no longer use. Sell your car and get a cheaper one. Sell your house, if you have equity, and purchase a cheaper home. Get an extra job or work from home as a freelance writer, web designer or babysitter. Make cakes, arrange flowers or fix cars on the side. Cash in any life insurance policies you do not need.

7

Pay off the debt with the highest interest rate or lowest balance first. Once it is paid off, combine the money used to pay off that card with the minimum payment on the next debt, until all debts are paid off.

8

Celebrate each debt or credit card that is paid off. Make a list of free things to do in your town and enjoy one event, museum or park each time a card is paid off. Have fun along the way to keep your momentum up.