10 Easy Steps to Becoming Debt Free Start Today!

It’s well known that debt is rampant across the country right now, whether it be big corporations trying desperately to stay afloat, or your neighbor next door whose home is in foreclosure.

Maybe debt is having a crippling affect on your life, as well.  Despite all the magic formulas that are advertised on late night TV (which are most likely money hungry scams that will put you further in debt), there are 10 simple steps you can take right now to get back on the right financial track.  And – good news – you can do these steps without having to drastically change your life, or your lifestyle.

Each person’s financial situation is different, but for many, making small but significant differences in the way you spend your money is all it takes. Here are 10 fast and easy steps to becoming debt free:

Step #1: Establish a Budget

Only you know how much is coming in each month, and you need to take a hard and honest look at this figure.  Lofty dreams of what you actually make probably helped put you into debt in the first place.  Put a budget in place and cut up those credit cards.  Spend only what you can afford to spend.  It’s really that simple.

Step #2: Refinance or Consolidate

Contact your lenders (including mortgage lenders, car loan holders, and credit card lenders) and inquire about getting a lower interest rate on the loans you have.  For loan contracts that can’t be changed, pay off the loans with higher rates first.

Ste #3: Get a Second Job

Having extra money coming in can help you pay down what you owe.  Over time, having a second job or just working from home can help you establish a savings account when your bills are all caught up.

Step #4: Establish a Financial Plan

Put a financial plan in place for your future.  Get a financial planner to help you with this if you need to.  A financial plan should have short and long term goals, and include things such as saving for your children’s student loans and putting money aside for investments and/or retirement.  Get serious and focus on priorities.

Step #5: Attack Credit Card Debt, One Card at a Time

If you have multiple debt from multiple credit cards, pay down one card at a time if you are feeling overwhelmed. Start with the card that has the highest interest rate, and go from there.

Step #6: Know Your Spouse’s Debt

Debt can cause many problems in a relationship, especially when your spouse is spending money that your household simply doesn’t have.  Make sure to write out all of your monthly bills together and balance your checkbooks together.  You may see areas where spending is getting out of control.

Step #7: Buy Everything With Cash

If you want something bad enough, take your grandfather’s advice and save for it.  Use credit cards for emergency situations only, not as “free” spending money that you really don’t have.

Step #8: Eat at Home

Dining out at restaurants should be saved for special occasions when you are trying to get out of debt.  Instead of ordering take-out or putting the kids in the car and going to Chili’s, make meals at home.  Not only will your meals likely be healthier, they will cost pennies on the dollar compared to restaurant food (don’t forget the drinks, tax and tip!).

Step #9: Get Organized With Your Debt

Keep your financial records in order and know exactly how much debt you have, and to whom.  Organize your bills in the order they need to be paid off.

Step #10: Ditch the Extras

Get rid of things that are causing extra bills that you don’t need.  Cable, multiple phone lines, even multiple family cars are good places to start.  Start living more simply.  This is also a great way to teach your children about money and living financially responsible lives.

Getting control of your debt is the only way out of debt.  Use these 10 tips to help you work towards becoming debt free.