If debt free and worry free living are something that sound good to you, then you're in the right place. We're about to go over a plan that will help you eliminate your debt faster than you ever thought possible!
1. Get your spending under control. Stop buying anything with your credit cards without it is something that is absolutely essential to live and you can pay off the balance in full at the end of the month. You need to stop accumulating bad debt.
2. On a sheet of paper or in an excel spreadsheet, list all of the people or creditors that you owe money too. Next to each name, list the current balance or total amount owed, the interest rate, and the minimum monthly payment.
3. Rank your debts by interest rate, starting with the highest rate first. Another way to do this would be to rank your debt by the lowest current balance first. Which way you choose will depend on your level of motivation. By paying off your higher interest debt first, you will be saving yourself some money in the long run. But if you're desperate to see something happening with your plan, you might want to pay off smaller balances first to keep you motivated.
4. This step might be rough, especially if you're already struggling to get by. But you need to find some extra money that you can apply to your debt reduction plan on a monthly basis. Obviously the more money you can come up with the better, but anything will help. As I mentioned, finding extra money is not always easy, but if you dig deep enough you can usually find some unnecessary expense that can be cut out, such as smoking, tv, or paying for that coffee on the way to work. You can then use that money towards debt reduction.
5. Starting with the debt you decided to rank # 1, make your monthly monthly payment plus the extra money you came up with. On everything else, make the minimum monthly payment only. Continue to do this every month until the first debt is paid off. On the following month apply the minimum monthly payment from debt # 1, the minimum monthly payment from debt # 2, and the extra money to debt # 2. Continue to make the minimum payment on everything else. You will follow this pattern until your debt is completely eliminated. Good luck!