The Quickest Path to Being Debt Free

 

 

There are hundreds of different companies and individuals who purport to have the absolute solution to your debt woes. Some are better than others, and these people all claim that they have your best interest at heart when in reality they have to be able to make money from your debt in order to survive. What they donâ??t tell you is thereâ??s a far more simple and far easier way to get rid of your debt as fast as possible without anyoneâ??s help and without spending a dime. Some of the debt elimination products use the following strategy on some level, but if you apply it on your own, and really stick to it, youâ??ll be debt free long before you ever thought you would be.

 

Eliminating debt can be compared to a triage situation. Some bills bleed you of money faster than others while some bills are only minor and donâ??t really cost you too much of your hard-earned money or financial life blood. If you look at your bills and identify which ones are most urgent as well as which ones charge the highest interest rate on unpaid balances youâ??ll be done with the first step in this financial strategy. Knowing what is costing you the most is the first part of the equation.

 

The second part of the strategy is figuring out how much money you can afford to allocate toward paying down your debt. Once you settle on a realistic figure, you can then begin to pay off your debts starting with those with the highest interest. By paying these bills first, you are stemming the tide of high interest rates sooner and paying off more and more the principal balances instead of having most of your payment going toward only the interest. Declare an all out financial war on the bills that are the highest interest rates and get them paid off as soon as possible. Once you begin to do this, it will free up more and more of your budget as you pay off more and more of your high interest bills.

 

The third and possibly most important step after you begin to eliminate your highest interest rate debts first and free up a little cash is to take what you would have been paying and continue to roll it over into the next highest interest rate debt. For instance, if you were paying $500 per month credit card bill and $300 per month on a loan, and you were able to pay off your entire credit card balance, freeing up that $500 per month, you should now apply it toward your loan, for a total of $800. Rolling your money over to the next debt will help you create a snowball effect with your payments until you get the next debt paid off and so on. You will be astonished at how quickly debts will begin to disappear especially if you stick to the strategy of rolling over any extra money freed up by paying off a debt into the next highest interest rate debt. As soon as you get something paid off, start paying off your next debt until you’re debt free.

 

This system works for debts large and small, so be sure to look at both your short and long-term financial goals and be realistic about your planning. This realism, coupled with a tenacity to terminate any and all debt will have you feeling empowered and in control of your financial situation and ultimately your future.