Debt keeps you stuck in the past and robs the future from you. Simply because your income is your main source of wealth, if you keep funneling in to pay debts for the past purchases or commitments with high interest rates, it will be hard to build a wealthy future.
Here is the good news, you don’t have to be stuck making payments to your past any longer. There are ways to get you out of debt, it needs your commitment and a little sacrifice – depending on how big your debt is.
What Is Debt?
Popular types of Debt?
• Student loans
• Car loans
• Credit cards
• Medical debt
• Home mortgage
• Car financing
• Payday loans
How to Pay off debt?
1) Commit to never use debt again:
2) Have plan for your money (budget)
If you want to start winning with your money, you have to make a plan, a plan with money means a monthly budget, which is simply telling your money what to & where to go.
There are different styles of doing a budget, the one I do recommend is the zero-based budget – which at the end have zero balance between your income and your expenses.
Your first budget might be a little hard and complicated (by looks),It takes two to three months to get used to it. It’s worth the effort. The budget is what helps to keep you on track as you work toward paying off debt & creating your wealth.
3) The recommended method to get rid of debt: Debt Snowball
After doing your budget, use the debt snowball to start paying your debt. This is the way to gain momentum as you pay off your debts in order from smallest to largest. A lot of people will tell you to pay off your largest debt or the one with the highest interest rate first. but paying off your debt is more than just the numbers, its also physiological. If want to stick to it, you must see quick wins and see progress, and that’s why the recommended method is the debt snow ball.
Steps:
A. List your debts from the smallest to largest amount (not interest rates)
B. Make minimum payments on all debts, Place whatever extra money you can find at the smallest debt. Be very serious about clearing that debt (smallest) as fast as possible
C. Now take the money you were paying on that small debt and add it to what you were paying on the next-smallest debt.
D. Afterwards, keep doing this same method until you cross off the very last debt on your list, which is the largest. No matter how long it takes, you’ve made the commitment and decided to be debt-free person.
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© SEIF EL HAKIM – ALL RIGHTS RESERVED
Comments (2):
Roztayger
Great content! Keep up the good work!
Mark
Thanks for your blog, nice to read. Do not stop.