Eliminating credit card debt. Like most things in life, accomplishing this task all depends on you, and what sacrifices you are willing to make. And talking from experience (about five thousand dollars worth), I can tell you that it is a painful, and very strictly disciplined affair, but of course well worth it in the end. You’ll never sleep better in your entire life than the first night you truly become debt free.
Step one is the most simple, and very eye opening. Collect every single bill, the most recent copies, and put them all in one pile. Everything. Anything that is outstanding, pile it all up. If you don’t have your bill for this month from a company, call their customer service number, wait twenty five minutes on hold, talk to someone halfway across the country or the world, and have them fax you your statement as of today.
Next, add it all up. Eliminating this debt will not work with rough estimates of what you owe, and who you owe it to. Calculate every single balance, and compile it into one number (often a very large and scary one).
Upon completion of this task, now write down all your monthly expenses. Car insurance, gas, food, rent, utilities, and leisure money. Everything you spend. Now, look at this figure and find out every single possible way to minimize these numbers as much as possible, while still paying for all of your essentials. For example, if your most recent grocery receipt says you’ve spent twenty dollars in miscellanies junk food, eliminate it! Not only are you doing your wallet a favor, but you’ll be doing your gut a favor too. Your leisure money, cut almost all of that out. There are so many things you can find to do in your area that are free, or dirt cheap. Just do some research and you’ll find a way to still enjoy your leisure time, while not spending nearly as much as you have been in the past.
Now take your monthly income, subtract from that your new monthly expenses, and the left over figure is your money to keep. Now for most people in credit card debt, this left over figure ends up finding its way into the leisure section of your expenses very quickly and very easily. DO NOT DO THIS ANYMORE!
Find your debt with the highest interest rate, and eliminate it as quickly as possible, while making minimum payments on the rest. It’s a lot better to eliminate them one at a time. You’ll be saving money in accrued interest, but you’ll also get the satisfaction mid way through your quest of finally eliminating one of your debts by one hundred percent. It won’t be there anymore, and that is a truly amazing feeling.
Work your way down the line, debt by debt. Highest interest rate, minimum payments on the rest, etc. Not only will this eliminate the debt at a rapid rate, you’ll find yourself finding new ways to decrease your monthly expenses. You might start cutting coupons for your groceries, maybe take public transportation when applicable to save on the ever rising cost of gas. No matter what is is, minimizing any expense is just more fuel for you to finally get the debt monkey off your back.
Once you have moved your way down the line and finally have gotten rid of that very last bill, sent out the very last check, scream. Scream at the top of your lungs. Yell, cry, run circles around your house, run in your front yard, scream your head off like a eight year old boy who has just hit his first little league home run. Trust me, it feels good.
Following these steps seems to be the most rational, and the easiest way to work your way down the line bill by bill, and finally starting your new life of saving, and financial freedom.