Debt Buster Tips

If you are tired of having bills, paying interest each month and never getting ahead you may be ready to get out of debt. There are steps you can take to get out of debt quickly. Many people make mistakes, which slow the progress of getting out of debt. Each step you take needs to have a specific purpose and focus.

Make a Plan

One common mistake is to spread extra money you have to pay off debt over several different debts. This weakens the power of the extra money. Instead, set up a debt payment plan that focuses on the money on one debt at a time. List your debts in order from the highest interest rate to the lowest interest rate. The first debt on your list will get all the extra money you have applied to its balance. Make the minimum payments on all of your other debts while you work to get rid of the first debt. Once the first bill on your list is paid off, apply all of the extra money you have to the second debt. Continue rolling the payments to the next debt on your list until you have paid off all your debts.

Stick to Your Budget

Your monthly budget helps you control your spending. You need to have a monthly budget and use it to track your spending and make sure you are not adding to your debt each month. A budget can also help you find expenses you can cut back to get more money to apply toward debt. A budget can show you if you do not make enough money to cover your basic needs, which will tell you that you need to increase your income as quickly as possible.

Get Intense

Find ways to apply more money to your debt payment program. Consider holding a yard sale or selling items on the Internet to pay off your debt more quickly. Taking a part-time job until you have your debt situation under control can shorten the time you are on a tight budget. If you get extra money from a bonus or an inheritance, apply it to your debt payment plan.

Stick With It

Most people accumulate debt over time, and so it will take time to pay off your debt. Reward yourself as you hit milestones. This can help you stay motivated even though the plan may take a year or two to pay off completely. Plan a big reward, such as your dream vacation paid for in cash, when you become completely debt-free.