How to Be Debt-Free in 10 Years

It doesn't matter what the economy is like, people are always worried about paying off their debt. Depending on the amount of debt you have, you may be able to pay your debt off quickly. If your debt is larger, you may want to create a goal to pay everything off in 10 years. Creating a plan to meet that goal--and sticking to it--can help reduce financial stress. The following steps will ensure that you're debt free in 10 years.

Instructions

1

Make a spreadsheet of your debt. It's not uncommon to have several credit cards, loans and credit lines. Looking at a large stack of bills can make your debt seem overwhelming. Take time to create a spreadsheet that lists each debtor and the amount owed. As you pay your bills each month, you can update the totals. Seeing your debt go down each month can motivate you to work harder towards being debt free in 10 years.

2

Send more than the minimum payment. When you only pay the minimum amount due, you not only increase the time it takes to pay off the debt, but you also increase the interest to be paid. A quick look at your budget and other expenses can better help you determine how much you can afford to send to each debtor each month.

3

Pay off high interest debt first. You may be tempted to pay off small accounts first, but it makes more sense to pay off high interest debt first. The faster you're able to pay off this debt, the less you'll end up paying on the debt.

4

Create payoff date goals for each debt. Once you've determined how much you can pay each month, do a bit of calculating to determine when the debt will be paid off. Add these dates to your spreadsheet and calendars. To keep yourself motivated, you can also write down small goals as well. For example, you might have yearly goals that state what your amount of debt should be by that date.

5

Review your spreadsheet and plan often. It doesn't do any good to create goals and a plan if you don't stick to them. Each month, sit down and see where you're at. It's important to make sure you're doing what it takes to meet your goals. Also make sure to look over your budget to see whether or not you can make larger payments.