The first key to getting out of debt quickly is to quit funding purchases with debt. Additional steps include establishing a budget, setting up a debt repayment plan and earning extra cash.Continue Reading
Using debt to make large or non-essential purchases is a habit. Before a person can get the ball rolling on getting out of debt, that person must quit adding to the debt through purchases. Building a rainy-day fund of $1,000 or more may help someone stick to this commitment in an emergency.
Paying off debt requires that an individual's income or revenue exceeds his expenses. Setting or reviewing a budget gives a realistic view of the current financial situation. For example if your income exceeds monthly expenses by $300, you have that amount to put toward debt.
There are two common strategies to paying off debt. One is to pay off the smallest balances first, which creates a snowball effect. The other is to pay the highest interest rate accounts first, which minimizes the amount of interest payments.
An individual's ability to pay debt quickly is impacted by his income. One way to expedite repayment is to find ways to earn extra cash and put it toward debt payments.