Are you in debt? If so, do you know it’s possible to get rid of your debt on your own. Below I have provided an effective plan that will guide you to get out of debt by yourself. You no longer have to pay any debt help companies for assitance or pay high interests to debt consolidation companies to transfer you debt over. This DIY debt elimination plan is all your need.
1. The first thing you must do is gather all your financial documents that pertains to each debt you have.
2. Get a copy of your credit report from all three credit bureaus(Equifax, Experian, TransUnion) to see where you stand and find out what your current credit score is. These first two steps art the most important steps in getting out of debt because doing them will show you where you stand financially. That’s why so many people never get started, because their are fearful of what they will see.
3. Grab a piece of paper, and jot down all the balances, interest rates, and minimum amount due for each credit card or debt. You should also included any personal loans, payday loans, auto loans, and any other debt you pay on a monthly basis. Also, even though you pay your mortgage or rent on a monthly basis, you don’t need to include it at this time. The reason for that is these type of loans are usually necessity loans that have longer mature terms and lower interest rates.
4. After all your debt information has been gathered, you need to take a look at your monthly budget. Write down your monthly net income.(that’s the income you make after medical, federal, state, and social security taxes have been taken out of you check). Then deduct your mortgage/rent payment from your income, including any other monthly expenses such as childcare, utility bill, cell phone, cable, and any other monthly expenses you may have.
After you have subtracted all of your expenses, calculate how much money you have left of your net income. That figure will be how much you have left to pay off your debts. Now, If what is remaining is too small to pay off your debt, you may need to find ways to supplement your income, or may need to start reducing some expenses. You may want to consider downsizing or cutting off your cable for a time being until most of your debts are paid off. The reality is that the more you can pay down your debt, the sooner you will be debt free and financially independent.
5. Create a debt elimination plan – Now that you know what’s in front of you, you can now develop and create a debt elimination plan to reduce and eliminate your debts. Take the information you gathered from the first two steps to get you on your way.
