If you really want to know how to get out of debt fast on your own, firstly, BELIEVE that it can be done and that there many things you can do right now to start regaining control of your finances and eventually get on top of the situation. When you have a mountain of debt on your head that far exceeds anything you feel you could ever pay back on your current income, it is easy to give in to despair and do nothing except watch your debt grow BUT it is NOT hopeless and therefore totally worth trying and giving it your fullest attention and effort. You can do it.
It will motivate and drive you if you feel that you are in charge and managing the crisis as opposed to feeling like a helpless victim of your spending. Follow the steps below to firstly face the scale of the problem, then plan a comeback and finally implement and follow your plan and stick rigidly to it as if your life depended on it. Conquering your debt will require discipline and self control, there are no magic buttons to press but the sense of achievement you will feel, not to mention being debt free will make it more than worthwhile.
1. Getting out of debt fast first requires you to totally understand and acknowledge what got you into this mess in the first place. You have to accept that your lack of control and inability to live within your means brought you to this current crisis. Self denial has to be part of your daily life now if you are to reduce what you owe. Even if you think that saving a cent here and there will make no difference, count every penny you spend as if it were your last. Be ruthless when assessing whether you really need to buy something. Wherever and however you can save money do so even if you have to totally change your way of life. Be honest and sincere in admitting to yourself that you have only yourself to blame but that you can and will claw your way back to financial solvency.
2. Assess the amount and seriousness of your finances. Do not leave anything out. Make a thorough list of everything and everyone you owe down to the last cent. There are several ways to organise this list depending on which approach to settling your debts you want to take. Dave Ramsey thinks that the best way to tackle your debts is to pay off the smallest amounts first. This way you will immediately see results and be motivated by it. Others suggest paying off the debt which incurs the highest rate of interest first so that you are reducing the amount by which your debt grows. Sometimes the decision will be made for you, maybe there are some debts which are more urgent than others because they are way past due or you are about to be taken to court. Decide which debts you will tackle first and put them at the top of the list.
3. Stop incurring more debt. There is no point in trying to pay off your debts if you are continuing to add to them at the same rate. Cut up all credit cards immediately. Stop all unnecessary expenses straight away. Reduce your outgoings to the bare minimum you need to survive. If you are used to buying coffee and muffins for breakfast, get up earlier and make yourself breakfast at home instead. If you buy a sandwich for lunch take a packed lunch from home instead. Don’t eat out. Make sacrifices even if you have to drastically cut your social life for one year it will be worth it. Instead of going out to somewhere expensive arrange trips with friends that involves something cheaper.
4. Take stock of all your assets. By this I mean anything that you possess that you no longer need that could be sold to raise cash. This includes household items and gadgets, clothes, ornaments, books, electronic gadgets, basically anything that you own but can do without. Be ruthless. Clear out all clutter and unused items and sell them, even if they don’t fetch thousands every little counts.
5. Assess your talents and abilities. If you are good at something that other people will pay for then use it. For example, if you are a secret omputer whizz and can fix common problems such as printer issues or home network set up, then offer your services to friends and neighbours for a fee. If you are a keen gardener print up some leaflets cheaply and distribute them yourself to your local neighbourhood. Lower your expectations, this is no time for ego. Get out there and see what people need doing and are prepared to pay for. Wash cars, clean windows, clear garden rubbish, walk the dog, whatever it takes to bring some cash in, try it and then save the money in a special account or place until you have a good enough amount to make a real dent in one of your top debts.
6. Get another job. If you work full time, you still have the weekends for money making potential. It might seem tedious and nothing but hard work but no one said this was going to be either easy or fun. Get a part time job in a shop, fast food place or supermarket and save every penny earned to put towards your debts. If you work in a supermarket, for example, you might save in another way too by shopping there and using your staff discount!
7. Have an emergency fund. Even though you will want to put every cent towards paying off your debts, you will fail if you don’t have an emergency fund. This is because there are always crises in life and when comes up such as your car breaking down you will immediately use your debt paying cash to fix it. Therefore, if you have an emergency fund you can use this instead for genuine times of need which will safeguard your debt money. The amount in the fund will need to reflect your earnings and lifestyle. Dave Ramsey suggests at least $1000 but if this seems to much to save right now then start with something lower.
8. Be committed. This is not a get rich quick scheme. It takes dedication and staying power but if you stick at it life will be so much richer if you pardon the pun. Visualize what it feels like to wake up and know that you are debt free. That stress will be lifted from your shoulders and you will be free to use your spare cash instead to fulfil your dreams and goals. Imagine also how much better life will be for your family without having to live with the worry and pressure of a life in debt.
So there you have it. Some real concrete steps to getting out of debt fast on your own. Try it and you might just surprise yourself and those around you.