What is the best way to get out of debt?

Answer 1

Take excess money and pay it off.

Excess money should be the money remaining AFTER all NECESSARY bills are paid. You have to define necessary for yourself, but I would suggest you keep that list as short as possible.

Be sure to send any extra money to the bills with the highest interest rate.

I'd recommend a second job whose whole purpose is to reduce your debt.

Answer 2

First you need to analyze where you're spending your money. Get a small notebook and write down EVERYTHING you purchase in a week. You'll be surprised just how much you're spending and on what.

Next you'll need to create a payoff plan for your credit cards. Make sure to pay at least the minimum payment on each card monthly and pay it on time. Late fees don't help reduce the balance you know!

Pay extra on the account with the smallest balance. Once you have this account paid off do not put anything else on it if it is a credit card. Once the smallest balance account is paid off take the money you were paying toward it and start applying it to the next account that now has the smallest balance. Continue this process until you have all of your accounts paid off or back under control.

Paying yourself out of debt is not going to happen overnight nor is it a painless process. You first have to understand where you're spending your money and identify areas where you can cut corners.

Once you've got those bills under control or paid off put the money in savings! You should have 6 months of regular expenses saved and not use them except in case of an emergency.

We have become a nation of spenders instead of savers. Break the trend! Do we really NEED all that we purchase or do we just WANT it to "keep up with the Jones'"? Look around your house...do you have anything you can get rid of at a garage sale or a consignment shop? You'll be surprised at just how much stuff you don't use or really need! Use the 12 month rule for this ...if you haven't used it or needed it in the past 12 months do you need to keep it? I know there are some things that are sentimental but keep those to a minimum and you'll not only make money on the "old" stuff but you'll convert them to cash and your house will be less cluttered too!

Good Luck!

Answer 3

Cut up the credit cards except one. No more new loans. Consolidate old debt to a smaller payment and pay on time until the debt is gone. This is not compicated. If you have a spending problem, you need counseling, buying only what you NEED is helpful and necessary to stay clear of a serious debt problem. Good luck, don't make it more traumatic than it is, you can do it.

Answer 4

Stop buying things with credit. If you don't have the money to pay for something other than a homeloan or a car loan, then don't buy it. Save your money and pay cash. I am 30 years old with no credit cards and my only debt is my car. I have a beautiful credit report because I did build credit young a little at a time and pay it off quickly and then I got rid of all credit cards and now if I want something I go and buy it with cash. If I can't afford it I save for it and usually find that once I have enough money saved up for it I don't really want it after all and I find something else to buy.

Answer 5

1. Cut out ALL extraneous expenses (cable TV, eating at restaurants, video game purchases, desserts) and focus your spending on absolute necessities.
2. Then, determine how much you have budgeted at the end of the month for your bills. Hopefully, you have more to spend than you owe in minimum payments.
3. Determine the interest rates of all your debts.
4. Make minimum payments on all bills except the one with the highest interest rate. Spend all remaining money except $150 (if you have it) on this bill.
5. Put $150 in savings and DON'T TOUCH IT unless you have a true emergency.
6. Don't buy on credit. Get rid of your credit cards. They are doom in plastic.

Good luck!

Answer 6

The first thing you should do, if you have credit cards, cut them up and cancel them. Start paying more than the minimum payment if possible. Sit down and figure out where your money goes and cut out all unnessary spending-like eat out less, rent movies instead of going to the movies so much. You'll be surprised at how all these little things add up. Hope this helps.

Answer 7

Sit down and make a plan on how to get out of debt. There are a lot of financial advisor's out there who can also help you out.

Answer 8

The first thing you need to do is get rid of any credit cards you might still have that are active. You can close the accounts but still pay on your bills. Then attack the smallest bill first. You can check out Dave Ramsey's site also for more help: http://www.daveramsey.com/

Answer 9

Go to the company that charges you the least interest. Have a plan worked out of your income and expenses and ask them to amalgamate all your credit into one account. If they agree to do this when you get your statments try paying more than they ask for monthly. This will re-establish your credit rating and reduce the amount of interest you are paying....Good luck.

Answer 10

If you have a job, then get the maxiumum amount you can afford and pay off the debt with the highest interest!!! While the other ones, pay the minium payment.