If you are in debt up to your eyeballs and can’t see the light at the end of the tunnel. Here a bit of good news though; you can get yourself out of debt. It takes a few steps, some time and a little bit of perseverance. As long as; you dedicate yourself to the steps I’m going to out line you can be out of debt in one to two years. That may seem like a long time, but take into consideration that a bad debt or a bankruptcy can take up to 7 years to come off your credit report.

The Steps

Here are the steps you need to begin to free yourself of debt. Do not be deceived by the apparent ease of these steps. They are misleadingly simple to look at at but more difficult to implement.

• Gather your bills together and compute your total monthly payments.
• Gather together you last 4 pay checks and calculate your monthly income. If you are in an occupation in which you work extra hours for premium pay. Then you need to take your standard hourly rate and multiply it by 40, then subtract 20%. This will give you a rough estimate of your 40 hour pay. You then need to multiply this by 4 to calculate your monthly take home pay.
• Now you need to take your monthly pay and subtract the amount of your monthly payments. You should have a positive number here. If not the next step is going to be very painful and now you know why you are in such severe debt.
• Now for the dirty word; you need to make a financial plan. Most people are completely against this because they take a bit of time to create and a lot of restraint to keep. Unfortunately, creating a proper budget is beyond the scope of this article.
• You will need to make some changes in how you spend money. Things like cutting out the non essentials. Things like going out to dinner every Friday night. Now being married myself I know that your spouse will only tolerate this for so long. So to keep the tranquility try to limit dinners to 1 or 2 times a month.

How this works.This is how this all comes together. After writing your budget; and freeing up available cash. You have to take that money and use it to pay down your highest interest account. That is paying over the minimum balance due each month. What this does is your payment on this account starts going to the principal balance; and not merely the interest charged on the account. This is the trick to all of your credit card accounts; that is why you can never pay it off by paying the minimum balance. Now after you pay off the highest interest account work your way down the rest of the list.

After drowning in debt myself; I fought to find a way out. With out going to a debt consolidator or using bankruptcy. Please read my other articles here and here