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Getting Out of Debt


While your mountain of debt

may be daunting, it's possible to get to the top and clear

your financial name!


Getting Out of Debt

Credit Cards

Bank Loans

Mortgage


Step 1: Organize Your Debts Smallest to Largest

• Pay only minimum payments and any left over money is directed to the smallest debt until it is paid off.


Step 2: Eliminate Small Balances First

• If you have a card with a low balance, pay it off first.

• Then reroute the money for that card’s payment to pay off cards with higher balances or a higher interest rate.


Step 3: Take Advantage of...

The

SnowballEffect


Step 4: Stay Focused

Keep your eye on the your goal. And repeat the process until all the debts are paid-off.


Step 5: Avoid Skipping Payments

Skipping payments will lead to many extra fees and harassment by debt collectors!


Step 6: Be Careful when Considering Debt Consolidation Companies

There are plenty of scams in the debt consolidation industry. You are better off doing all the

negotiations yourself.


Debt Consolidation• Getting a loan from the bank to pay off your credit

cards can lower your interest rate.• Read the fine print on credit card offers that entice

you to transfer your higher interest balances to them.

• Debt consolidation is one more way you can get out of debt without using any more money than you started with.


Step 7: Use Windfalls to Lower Your Debt

Any extra cash you plow into your debt will be multiplied when you think of all the money in

interest charges it will save you.


IRS Debt


If you owe money to the IRS, make those payments

your highest priority!


IRS DebtThe Internal Revenue Service can:• Take your house• Empty your bank account• Have you arrested on criminal charges• Confiscate your business assets regardless of the

fact that it puts you out of business• And much more!


Student Loans


Student Loans

• Include the student loans as part of your debt snow-ball

• Consolidate them to avoid multiple payments.


Car Loans & Short Term Loans


Car Loans and Other Short Term Loans

• Usually carry lower interest rates than your credit cards.

• To avoid having eternal car loans, make a plan to put some funds aside so you can pay cash for your next car.

• To lighten the load of another car loan, consider a used car.


Mortgage Loans


Mortgage Loans

• Assuming this is your remaining debt. Focus all your extra money toward the mortgage and pay-off your home early.


Bi-Weekly Mortgage Plans

• With a bi-weekly plan, you pay approximately ½ of your regular monthly payment every 2 weeks.

• You can pay off your mortgage 8 – 15 years sooner, saving you many thousands of dollars in interest!

• You don't need approval from your mortage company, just send in an extra payment every month which will be applied to your principle.


Self-Reflection Questions:

• Can I pay off some of these loans early without penalty?• How can I cut my expenses to speed up debt repayment?


Action Tips:• Make a written plan for paying off your debts and

then follow your plan.• Consolidate as much of your debt as possible.• Pay off the smallest debt first.• When a balance is paid off, reroute that money

towards another balance.

Download - Getting out of debt

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