Get out of debt

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Getting Out of Debt
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    While your mountain of debt  may be
daunting, it's possible to get to the top and
clear your financial name!
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Getting Out of Debt
Credit Cards
Bank Loans
Mortgage
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Step 1 Organize Your Debts Smallest to Largest

• Pay only minimum payments and any left over money
  is directed to the smallest debt until it is paid
  off.

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Step 2 Eliminate Small Balances First

• If you have a card with a low balance, pay it off
  first.
• Then reroute the money for that cards payment to
  pay off cards with higher balances or a higher
  interest rate.

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Step 3 Take Advantage of...
Effect
Snowball
The
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Step 4 Stay Focused

• Keep your eye on the your goal. And repeat the
  process until all the debts are paid-off.

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Step 5 Avoid Skipping Payments

• Skipping payments will lead to many extra fees
  and harassment by debt collectors!

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Step 6 Be Careful when Considering Debt
Consolidation Companies
There are plenty of scams in the debt
consolidation industry. You are better off doing
all the negotiations yourself.
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Debt Consolidation

• Getting a loan from the bank to pay off your
  credit cards can lower your interest rate.
• Read the fine print on credit card offers that
  entice you to transfer your higher interest
  balances to them.
• Debt consolidation is one more way you can get
  out of debt without using any more money than you
  started with.

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Step 7 Use Windfalls to Lower Your Debt

• Any extra cash you plow into your debt will be
  multiplied when you think of all the money in
  interest charges it will save you.

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IRS Debt
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If you owe money to the IRS, make those payments
your highest priority!
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IRS Debt

• The Internal Revenue Service can
• Take your house
• Empty your bank account
• Have you arrested on criminal charges
• Confiscate your business assets regardless of the
  fact that it puts you out of business
• And much more!

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Student Loans
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Student Loans

• Include the student loans as part of your debt
  snow-ball
• Consolidate them to avoid multiple payments.

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Car Loans Short Term Loans
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Car Loans and Other Short Term Loans

• Usually carry lower interest rates than your
  credit cards.
• To avoid having eternal car loans, make a plan to
  put some funds aside so you can pay cash for your
  next car.
• To lighten the load of another car loan, consider
  a used car.

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Mortgage Loans
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Mortgage Loans

• Assuming this is your remaining debt. Focus all
  your extra money toward the mortgage and pay-off
  your home early.

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Bi-Weekly Mortgage Plans

• With a bi-weekly plan, you pay approximately ½ of
  your regular monthly payment every 2 weeks.
• You can pay off your mortgage 8 15 years
  sooner, saving you many thousands of dollars in
  interest!
• You don't need approval from your mortage
  company, just send in an extra payment every
  month which will be applied to your principle.

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Self-Reflection Questions

• Can I pay off some of these loans early without
  penalty?
• How can I cut my expenses to speed up debt
  repayment?

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Action Tips

• Make a written plan for paying off your debts and
  then follow your plan.
• Consolidate as much of your debt as possible.
• Pay off the smallest debt first.
• When a balance is paid off, reroute that money
  towards another balance.

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