The Fast Way to Become Debt-Free

With a global financial crisis affecting most of us, and with our debts seemingly not wanting to go away, advice on how to slowly pay off these debts, and be free from them is essential.

Some people try to get by through paying a little over the minimum amount required to their creditors, resulting in a vicious cycle with the huge amounts of interest involved. Thus, these people who use this method seem to be digging themselves into a hole they cannot get out of. Their debts refuse to disappear, and seem to stagnate and are barely reduced, if at all.

But you should know that there are better and more efficient ways of paying off your debts, with the result of being debt free. Bankruptcy should be a last resort, and if possible, should not even be an option. Results in filing bankruptcy may be swift, but its effects can easily be felt even years later.

So what should one do to be debt free? What is the quickest way to be debt free?

First and foremost one should list down all the existing debts. Once listed, arrange the debts from smallest to the largest and with the highest interest, usually these being credit card debts. You should also identify your largest low-interest obligations.

The plan should be to pay the minimum on all debts listed, but in this manner:

1. Start small and focus on the smallest bills
A few less bills mean less interest, less stress, and a shorter list to ponder. Pay off these small debts and bills. Stop them from adding even more interest to already interest laden debts.

2. Once the small bills are paid, go to the next ones on the list
Look at the list you made, you have already paid off the smallest one, that's a step in the right direction. Now remember the amount you used to pay off the smallest debt? Carry that amount to the next smallest debt on your list. Use it to help pay off that debt, and so on and so forth.

As you focus on one debt at a time, focus on the debt with the highest interest rate. Because of its high interest this is the debt that keeps coming back to haunt you, so get rid of it first. Once you do this, use the money you paid for that large high interest debt, to pay for the one with the second highest interest. You will notice that your debts get paid faster down the line. The second highest interest debt will be paid faster than the first high interest one that you paid off.

3. Once debt free, save or invest!
You've done it! You've taken the debt free express and now have a lot of financial freedom. Now instead of once again getting tempted to take a loan, and be in debt again save and invest your money. You deserve it. You should pay yourself first since you worked hard for the money. In times of financial crisis like this, getting rid of debts should be top priority.

Thank you for taking a ride on the debt free express. I hope you enjoyed it.