Getting Rid of Debt

Almost every American has some kind of debt, whether it's students loans, a car loan, a mortgage, or plain old consumer debt that has piled up on their credit cards. It can be hard to get out of debt but it's not impossible and once you are out of debt you can put your money towards more important things like paying for your child's college education or saving for your retirement.

1. Make it automatic.
Set up a monthly, bi-weekly, or weekly transfer from your checking account to your sources of debt. If you don't have to write the check you'll never be late because your bank can make sure it's on time. I've set it up so that I have an E-bill as well as a "recurring payment". This means that I actually end up making about 4 payments a month on my credit card. They're not large payments but it means I'm paying off my card faster than I would normally.

2. Less spending, more income.
Make that your mantra. Every time you get the urge to make an impulse but, check yourself. Keep in mind the things that are really important like your child's education, your retirement, or simply your dream to travel or whatever your dream might be. But generic instead of brand name. The bottle that says Ibuprofen instead of Advil is the exact same thing. I kid you not. The same goes for food products. The second part of that mantra involves making more money. I'm pretty sure that writing for Associated Content is not your only source of income so use your primary income to cover all your expenses (including the minimum payment on your debt) and make the money coming from your Associated Content writing go straight to your debt. You might also consider getting a second job. It won't be permanent and you'll be glad you did it when your debt is paid off in half the time.

3. Snowball it.
Basically this just means making the minimum payments towards all but one debt. So if you have a car loan, a mortgage, student loans, and credit card debt, make the minimum payment towards three of those and focus all of your energies on paying off the fourth. There are two strategies to use here. You can select the payment with the highest interest rate to pay off first or you can select the payment with the lowest balance to pay off first. Neither way is right or wrong, it simply depends on your financial situation and what will motivate you first. Some people have found that starting with the lowest balance debt first is most motivating because you are able to see results soonest. Once you've paid off one of your debts "snowball" all the money that you were using to pay off that debt into another debt. You've been living without the money before so you can do it now. Eventually, you'll be paying your mortgage with the money that was going towards your credit cards, student loans, and car payments. It really adds up and you could even pay off your mortgage early.

It's a rewarding feeling to pay off all your debt and once you have you are much freer. Keep in mind that debt does not have to be a way of life.