How to Get Out of Debt in Ten Years and Own Your Home Free & Clear

Debt can cripple your financial security and your ability to plan for the future. In America, as of 2010, 40 percent of all households spend more each year than they make. The average American carries $8400 worth of credit card debt and pays $950 worth of credit card interest per year. Ninety-six percent of Americans who retire depend on the government or charity to get by.



If you could pay off all your debt--including your home mortgage--over the next ten years, imagine difference it would make to your financial security and to your prospects for retirement.

Instructions

1

Evaluate your debt. Get out all your statements. Figure out how much you owe, how much you pay against your debt each month and how much you add to your debt each month.

2

Use a debt payment calculator to determine how much you'll need to pay toward your credit card debt each month in order to pay it off in ten years. You can find a debt payment calculator at CNN Money, listed in the resources for this article, or visit your bank's website.

3

Use the same calculator to find how much you need to pay against your mortgage to pay it off in ten years. Add this amount to the amount you found in step 2 for the total amount you need to pay each month to reach your ten-year goal.

4

Add together how much you currently pay to credit cards and your mortgage and subtract that from how much you need to pay to be debt free in ten years. This is the amount you need to come up with out of your own budget or through extra income to reach your ten-year goal.

5

Eliminate all new credit card spending.

6

Review your monthly expenditures and find places to cut back. Being debt free in ten years is a big goal and might require some big steps like downsizing your car, cutting back on your grocery bill, reducing your clothing budget and limiting spending on extras like lattes. One good way to limit extra spending each month is to give each person in the household a cash allowance for their own discretionary spending. When it's gone, it's gone.

7

Find ways to earn extra money to make up for any shortfall you have. You might not be able to find the amount you need just through cutting your current budget. A second job, a part time job or a work-at-home venture like selling items through an online auction can help add to your income so that you can make the payments you need to in order to secure your financial future.