It’s finally fall and football season. You know your favorite team has a game plan for the season, but do you have a game plan to get out of debt? Debt could seriously be holding you back from your life and getting the most out of it. Being in debt doesn’t necessarily mean you’ve been financially irresponsible, but it will take some focus and a plan to get out of debt. Check out our game plan below and apply it to your debt and your life today.
Stop Borrowing Money
The first thing you have to do if you ever want to get out of debt is to stop borrowing. Immediately. If you are serious about turning around your debt, you have to stop making it larger, so that means no more signing up for credit cards or buying things you really can’t afford.
Establish an Emergency Fund
This is also a very important step. Establishing an emergency fund can help make sure you don’t go further into debt. Your debt may have started with an emergency; maybe you needed to pay for medical bills or a car to get to work because yours broke down. These may seem innocent enough, but if you start putting all these emergencies on your credit cards it can put you in debt quickly. If you establish an emergency fund right away, you can use that to help you not fall back into debt should an emergency occur.
Organize Your Debt
The next step is to actually look at the debt you have a decide where to go from there. Many people start by listing all of their debts smallest to largest. Then, they make large and frequent payments on the smallest debt until it is gone. They continue that process until they are debt free. The advantage of starting with your smallest debt is that you can pay it off quickly, which not only keeps you motivated to paying off your debt, it gets rid of an interest rate all that much sooner.
A big factor to consider when paying off debt is the interest rate. If you can, you will want to make payments larger than the minimum because then you will be done with your payments sooner, and you won’t have to pay as much in interest.
This step is important because it is making sure you are tracking where your money is going. If you set up a realistic budget and stick to it, you will be able to cut out unnecessary expenses and make larger payments on your debt.
Debt is not something you want hanging over your head. Use this Game Plan to get out of debt and stay out of debt.