How to Get out of Debt within Six Months

Borrowers typically find it rather easy to get into debt, but getting out of debt is another story. Without strict budgeting and planning, it can be very hard for a borrower to get out of debt in a short time. Each person involved in the process must be committed equally to the goal, and the goal must be realistic. By combining determination and realistic planning, a borrower can get out of debt within six months.

Instructions

1

List all debts that you owe. Include the total owed, as well as the monthly payment. To plan for the six-month repayment, add up the total of all debts. Now, divide that number by 6. This is the total amount that must be repaid each month in order to repay the debt within six months. If it is a very reasonable number, you may be able to pay off the debt faster. If it is a very unreasonable number (such as a multiple of your monthly salary), you may need to adjust your timetable.

2

Create a budget. Review several months of checking account statements and place each expenditure into a category. Review each category and look for ways to reallocate spending from unnecessary items to your debt reduction plan, if necessary. See if the monthly amount of debt repayment fits into your monthly budget or if additional cutbacks are needed.

3

Earn extra money in the short term to reduce debt faster. Take on a short-term second job, add extra shifts at work and/or volunteer for overtime. Sell off unused household items in a garage sale or online auction. Offer to do household chores for neighbors, such as mowing lawns or babysitting, to earn extra cash.

4

Review your savings and retirement account rules. In some instances, you may be able to borrow from your retirement account to repay other debts. The interest rate on the retirement account loan should be significantly lower than the interest rate on the credit card debt. If this option is available, revamp your plan to repay the retirement plan as opposed to the credit card debt.

5

Make the additional debt payment each month, and review your plan at the end of the first month. If it is not reasonable, or additional money could be placed toward the debt reduction, adjust your budget.