Here are 6 steps that helped me payoff my debts.
1. Make a List of All Your Debts
Take an inventory of your debts. Write down all of your credit cards, personal/student loans, car loans, student loans, mortgage, etc. Be sure to include the total amount owed and the minimum payment amount for each debt.
2. Rank Your Debts
You can rank debts starting with the smallest amount to the largest amount owed. Another way to rank your debts is to sort the by the highest to the lowest interest rate.
3. Focus on One Debt at a Time
Focus on paying off the first debt on your list. Pay extra money on the first debt, while paying the minimum monthly amount on the other payments.
4. Rinse and Repeat (Stay Focused)
Once the first debt is paid off, work towards paying off the next debt on your list. Continue to pay the minimum monthly amount on the other payments.
5. Tackle Your Loans
For personal/student loans, car loans, student loans, and mortgages, you want to start sending extra funds to be paid towards the principal balance.
6. Find Extra Money to Pay Your Debts
Cut back on unnecessary spending (eating out, cable, expensive lattes, golf/gym membership, etc). Consider getting a second/part-time job or a higher paying job. Check with your current employer, as it may be an opportunity to pick up overtime hours or obtain a promotion within the company. Other ways to find extra money is to sell stuff on amazon, facebook marketplace, etsy, ebay or a good old fashioned yard sale. Also, your talents and skills may lead you to a possible side hustle or work as a freelancer (Upwork, Fiverr or Word of mouth).
