Get Out of Debt Quick! 6 Easy Steps to Financial Freedom

I have a plan!  One day, we will all be living debt-free, and we will scream from the mountaintops, “Free at last!  Free at last; thank God almighty we’re free at last!”

With the plan I am using now, I’ve cut my own consumer debt drastically.  By the end of February I will have paid off my last credit card.  Since really getting serious about getting my finances in order, I’ve paid off 2 maxed out credit cards, 1 maxed out furniture card, a debt-consolidation loan and I’ve began funding an emergency fund.

What is the plan, and what steps are required to be on your way to the mountaintop?

1) STOP SPENDING!- Some people recommend that you start somewhere else, like creating a budget.  Creating a budget isn’t going to do you any good if you aren’t able to get your spending under control.  You’ll create a budget, and it will end up in a stack of bills and be tossed out a month later as you finally decide to sort through your credit card statements which are now late.  If you don’t have self-discipline to keep it in your pants, your credit card I mean, no other step in this list will make any difference to you.  Until you can stop spending, stop reading this post, because it’s not for you.

2) Create a budget- Now is the time to get your budget made.  Figure out your monthly income, to the PENNY!  Do not include overtime, only your base salary.  People who set up a budget and include bonuses and overtime pay are setting themselves up for disaster.  You cannot count on this as regular income, so don’t include it.  Next, track your expenses.  Start with what matters most, where you live.  Without a home your life will become very uncomfortable.  Pay your rent or mortgage first and on time always.  I don’t want anyone living on the street because they failed to consider the obvious.

3) Cut expenses- Look at your bills, you know, the ones you put in your budget, and decide what is unnecessary “fluff”.  Cancel your expanded cable, while you’re at it, cut the cable altogether.  Eliminate your landline if you have a cell phone. Your local library; the big brick building on the corner where no one goes, has internet they will let you use for free.  Get rid of text messaging on your cell phone.  Fire the maid and clean your own house.  Cut out as much as you can without sacrificing basic needs such as heat, electricity and food.  Find cheaper alternatives to the food you purchase now.  That doesn’t mean Ramen noodles and Spaghetti-o’s.  Fresh produce and meat may seem more expensive, but I assure you, with some creativity, it is not only cheaper than prepackaged foods, it’s also healthier and much tastier.

4) Create an Emergency Fund- With all of the cutting of expenses you will find a lot of “extra” money in your budget.  Don’t go to the mall and buy yourself a new sweater.  Instead, stick that money into an emergency fund.  You don’t want to get caught with no savings when something happens because you will be forced to charge it to your credit card.  Get serious about saving.

5) Sell your stuff- I’m a big proponent of minimalist living.  I have been taking steps of my own to sell most of the stuff I own that is no longer important to me, or that which provides no value.  Have a gargage sale, sell things on eBay, donate to Goodwill.  Not only will selling your stuff bring in some extra money to pay down your debts, it will help create a less cluttered life.  The less ”stuff” you own, the less stress you will have in your life.  I know it sounds crazy, but it is true. 

6) Stick to it- This is going to be the most difficult step.  It is easy to start dieting, it is hard to stick with it.  The same applies to getting out of debt.  For a while you will feel amped up and ready to take on your debt headfirst, but after a while the enthusiasm wears off.  It gets boring.  Paying down debt sucks.  Allow yourself a reasonable amount of money to do something fun once in a while.  Go out to dinner or see a movie.  Get the Double Chocolate Chip Blended Cream from Starbucks.  Better yet, find something to do that is free. 

Simple, isn’t it?  So what are you waiting for?  The bills aren’t going to pay themselves.  I’ve layed the foundation, now go grab your tools and start building your financial future!

Seriously, get going!