Remember the first time you rode that roller coaster? It looked like it would fling you off at any moment. You weren’t sure you had enough life insurance to provide for your family because you were definitely going to die that day – or so it seemed.
“If you want something you’ve never had, you must be willing to do something you’ve never done” -Thomas Jefferson
We all know how that day ended up. You were scared out of your mind before and during the ride, but after it was all over, you realized it wasn’t that bad. Some of you even wanted to go on it again! Such is life – finances are scary because most of us don’t know as much as we should about money. Putting our heads in the sand has cost us dearly in the past, and it’s clear the old way of doing things is not working.
The time to change your financial future is now. So get in, close the door, and put on your harness because it may get bumpy. If you stick with it, I promise you will make it out safe and sound in the end!
Hopefully, by now, you have taken the steps in the budget article and identified your income, monthly expenses, and debts. You should have a good idea of where you are financially – as grim as it may seem.
You may be in a place where it’s time to sell what you can to get out from under the crushing weight of your debt. Can you afford that car payment? How about the boat? Your level of financial insecurity will determine how drastic you need to get. Yard sales, Craigslist, Offer up, eBay, etc., are great ways to sell your stuff and bring in some much-needed income.
If you are struggling with how to get out of debt, follow these steps to get your life back on track. The way you currently are living isn't working so let's make some drastic changes in order to improve your life!
1. CREATE A BUDGET
A budget is the foundation of any debt free plan. Without a monthly budget, you have little to no chance of taking control of your money and eliminating your financial stress.
2. BE HONEST ABOUT YOUR AND "WANTS"
That is the simple formula to get out of debt. You are the one who gets to make the ultimate decision of how quickly you want to get out of debt. The more you cut, the faster it will happen.
3. DECIDE HOW MUCH SHOULD BE IN YOUR EMERGENCY FUND
The short answer is: $1,500 to $2,000. However, there is much more you need to know about emergency savings accounts.
4. CHOOSE THE BEST TO GET OUT OF DEBT
To get out of debt once and for all, it will take determination and personal commitment. The process will take time but the way you look at money will change. When you take control of your debt, you can begin to build wealth
If you’re in debt, you’re right – you’re broke. However, just because you are broke, that doesn’t mean you’re broken.
You’re broke because of some financial mistakes that were either your fault or something that was thrust upon you. Either way, you’re in debt, and it’s time to get out.
Even if you’re broke and on a low income, it’s still possible to get out of debt. By following the 4 steps above, even broke people can start to make progress. You’re either broke because you spend too much money, don’t make enough money or both. Control your spending, or you will never make enough to get out of debt.
Once you control how much you spend by creating a budget, you can focus on making more money with a side hustle or increasing your income at work. The steps to get out of debt don’t change – regardless of how much you do or do not make. Control spending and increasing income will ultimately be the key.