Drowning In A Sea Of Debt?
If you are drowning in a sea of debt, here’s a tip that can help you pay off your bills at an accelerated pace and take the stress of being in debt out of your life for good. I used it when I couldn’t figure out why my money wasn’t going as far as it should.
The first step to getting out of debt is to map out your finances to see where your money is going. To do that, you will need to gather all of your bank, credit card, etc., statements. List your income and then list your necessary expenses. These are those things that you have to have to live. For example, a home (it could be an apartment), heating and utilities, phone, transportation, etc. Then list what you are spending your money on. This could be clothing, trading for the latest and greatest new car, entertainment, the list could go on. The main point is that these things are nice to have and do, but are not really necessary to live.
The first time I did this, I got quite a shock. I discovered that I was spending more on the “wants” than I could afford. I learned that more money was going out for these things than was actually going to pay bills and the like. I also saw that it wasn’t big ticket items that was sinking me, but lots and lots of small items that were cropping up. This included small purchases using my credit card.
What To Do?
This was where it hurt some. The first thing I did was decide what I could live without and removed them as expenses. I stopped eating out as much, and stopped impulse spending. The latter being the most difficult to do. It took alot of discipline to do, but well worth it in the long run. The main point to this is that I had to be disciplined enough to stick to this no matter how much it hurt.
Rolling Up Your Bills
After that, I took a good look at my bills and decided to concentrate on paying off the smaller ones first. I kept up with the payments on the others as well, but in most cases it was something above their minimum payments. Once I paid off the smaller ones, I divided the money I was using to pay off those bills in two. Half of it was added to paying off the next bill in line while the other half was put in savings.
When the next bill was paid off, I repeated the process. The net result was that I was paying off my bills and saving money for the future. As each bill was paid off, the payments to the next one got bigger and my savings grew.
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