Article by Casey Kepley
Are you trying to get out of debt and sick of paying payments that don’t seem to getting any lower in the balance owed or just don’t go away due to interest charges? If you have answered yes then you need to read on. Most people are in debt so you are not alone. Realize that when you borrow from the lender that you are the slave to the lender. The good news is that you can get out of debt and be one of the few people who are financially free. You don’t have to be a slave to the lender and you can start taking back your life from lenders financially. The choice is up to you. You can either, keep living pay check to paycheck and continue doing the same things over but expecting different results or you can put an end to interest rates and monthly payments and start living financially free.The secret to getting out of debt is developing a personal financial plan that fits your lifestyle and keeps you from spending more than you take in each paycheck. Financial advisors agree that 80% of handling money is your behavior towards money the other 20% is head knowledge. If you know how to handle your money then you can keep some of the money you have left at the end of the month after paying your bills and either use that invest or pay off bills. The first thing you need to do is assess where you are now financially. List out all your bills that you have to pay on versus how much money you have coming in. Try to find out where every penny is going before you get paid. Have a goal in mind as to where it is you would like to be financially. Once you have a goal of where it is you would like to be financially then you have some motivation. This makes the long road ahead much easier to deal with as you pay off bills. Next, design and develop a plan to reach your goals. Lay out every month of finances on paper that you are managing for however long it is going to take you to get out of debt. This is your personal financial plan and very important to follow. You can reassess this plan as needed.Before you can lay out your plan it is important to list out your smallest to largest balances in debt. Attack the smallest balances first using the debt snow ball method. This means you pay the minimum balances on your highest balances first and start with the lowest balance. If it is possible, pay more than the minimum balance due on the lowest balance of debts that you have. Paying more than the minimum payment will help eat up interest charges and allow you to gain some traction for paying off the balance. Once your smallest balance is paid off then you take the money you were paying on the debt you paid off and apply that to the next balance on top of your minimum payment you have been making while paying off the first balance. What should happen is the snow ball effect. You are applying more and more money to each minimum payment on each debt you are trying to pay off once you have paid off the previous debt. Implement this plan once you have a personal financial plan in place. Once you have begun implementing the plan you will want to monitor the plan. Check the amount of money you have going out from time to time on other things. For example, if you don’t need 150.00 in groceries or can do without 150.00 in groceries for a month, cut back or change eating habits. This will allow you to have extra money to either put in savings for an emergency fund each month or pay towards another bill. Once your debts are paid off then you want to start putting that extra money into an emergency fun in case of emergencies. Until then, get out of debt first, that is the most important goal. Once you don’t have any payments each month then you will start to see that you have money once again and can do what you want to do. The financial plan will take some time to complete so be patient with yourself and don’t get discouraged. Stay positive and if finances are tight then try creating more income. Having the personal financial plan in place will help you overcome half the obstacle of getting out of debt.
Casey has been helping hundreds of people come up with a personal financial plan so they can get ahead and start living a better financial life. Visit his website for more information on debt snow ball method
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