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The Best Way To Get Out Of Debt
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The Best Way To Get Out Of Debt

When I lived in Colorado, my friends and I used to go camping, and we used to carry around in our backpacks "every thing but the kitchen sink" - not a good idea, I'm afraid. After an hour or so, the backpacks started to feel very heavy. Then our backs started to feel it, then the knees, and before long we wanted to either unload some of the stuff or just leave the bag alongside the road. Of course, we couldn't do that, but we surely wanted to.

If you are carrying around a lot of debt in your life, it can feel just like the backpack with "every thing but the kitchen sink". It will affect you family, your health and your future buying power. So, you need to unload the debt. But, many ask, "What is the best way to get out of debt?" And they want to know how to get rid of debt fast. Good news. You can not only get out of debt, but I will show you how to get rid of debt quickly. So here goes.

1. Fess Up: This is the hardest part, but absolutely necessary - write down every debt you owe, from the smallest to the largest. Also, write down how much you are paying in interest. It is shocking that most people with excessive debt just pay the minimum monthly payments, and they don't even know the interest they are paying on the loan.

One lady told me that she was so depressed with the amount of debt she owed, she refused to look at any details. She only paid the minimum. To come to terms with exactly how much debt she owed, and to realize that she was virtually pouring money down the drain, was too much for her to bear. Talk about the stork putting her head in the sand!

Believe it or not, once you write down your debt, you will feel "lighter", as if you took a huge item out of the backpack. The reason is because once your debt picture is on paper, it will feel manageable, and you have something concrete to work with instead of telling yourself that you are way over your head in debt.

2. Divide and Conquer: Okay, now that you have your list of debts, start paying down the smallest amount. Of course, continue to pay the minimum on the others, but really concentrate on the smallest until it's eliminated. You will immediately feel a sense of accomplishment, and this will strengthen your resolve to really do this. Once you pay off this small debt, take the money you were paying on it, add it to the next smallest amount, and pay that one off, too, using the same method.

3. Pay Yourself First: If you are heavily in debt, chances are you do not have any savings. So, each month, before you pay any of your creditors, pay yourself first by taking 10 - 15 percent of your earnings and putting it in an account for emergencies. When you do this, you are investing in your future, and you are also controlling your money instead of the other way around. You start to have a better mental outlook on your finances, and this will help you to have better self control so that you can reverse the behavior that landed you in debt hell in the first place. Of course, unforeseen occurrences such as an illness or job loss can demolish an excellent credit-worthy person's finances.

4. Be Realistic: If you are so loaded down in debt that you simply cannot think straight, and the bill collectors are hounding you day and night, you may need to ask for help. There is no shame in this strategy. There are many programs that will assist you in tackling your debt situation. Be very careful in choosing a company to work with you. Keep in mind that many debt management companies are partners, or affiliates, of credit card companies. So, they do not have your best interests at heart. Plus, about 70% of debtors don't stick with debt management programs; thus, they are worse off than when they began.

Using a debt negotiation company, on the other hand, may lower your actual balances, and not just your interest rate. This will help you to pay off your debt much faster. Most companies will take over negotiating for you so that your creditor calls stop almost immediately and you gain relief. And again, even in this scenario, you should be careful to choose a company with a good track record and reputation.

So, are you ready to dump that backpack? Don't wait until tomorrow or next week, do it now. The best way to get out of debt is really not complicated. You will be amazed at how you can get rid of your debt fast and have control over your finances again.


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