How to Become Debt-Free the Easy Way

Being in debt can wreak havoc in your life. Worrying about mounting debt can make you stressed and quick to anger from all the tension. Getting out of debt eases the strain and allows you to better prepare for inevitable financial crises in the future. It is easy to get out of debt if you are determined to sacrifice for a short while to ensure a debt-free future. The process takes consistency, a single-minded commitment and building new financial habits.

Instructions

1

Write down every expense you and your family members have each week or keep a total for a month. Even if it is just a pack of gum, a bag of chips or a soda, keep a running total in small notebooks each family member carries at all times. Another idea is to place every single receipt into an envelope if you use your debit card for all purchases. At the end of the week or the month, add up your expenses and determine where you can cut corners. Be creative: Cutting expenses may mean buying a 24-pack of sodas on sale and carrying a couple each day to work in a small cooler. It can mean buying a large bag of chips and putting them into individual zipper-style plastic bags. Pack a sandwich for lunch. Anything that saves you money is worthwhile.

2

Give each family member an envelope for his allowance each week. You can eventually give each member a monthly allowance, if you choose, but it is easier to struggle through only a week at the beginning. Tell each member that he is his own bank. He will not receive any more money until the next week's allowance. If he sees a big purchase in his future, he must save for it.

3

Designate an envelope for each bill you must pay during the month. Divide up how much you need to put in the envelope each pay period to pay the bill when it is due. For instance, if your cable bill is $80 a month and you are paid twice a month, place $40 in the cable envelope every two weeks. This ensures you will have the money when the bill comes due.

4

Set aside an envelope for an emergency fund and only use it for true emergencies, such as medical emergencies, car or house repairs. Consistently build up the emergency fund, just as if it were a bill, with at least $1,000. In the future, when an emergency arises, you won't have to resort to credit cards or bank loans to handle the expense. If you must deplete the emergency fund, steadily build it up again. The $1,000 should be in an easily accessible bank account that does not penalize you for withdrawals. Once you build the emergency fund, you can build a larger savings in another account.

5

Increase your income by getting a part-time job, having a garage sale, selling items online or by doing without every luxury until the debt is gone. Sacrificing for a short time is well worth the relief you will feel once you are debt-free.

6

Spend every extra penny you can on reducing your debt. Start with the smallest debt and pay extra on it each month until it is gone. After getting rid of that payment, take all the money you were paying on it and put it toward your next higher debt.