No matter where you are in your walk of life, your debt has gotten out
of control one way or another. If you’re one of the lucky ones and
have managed to get by without having large amounts of debt, then consider
this article a way to plan for the worst. If you follow these steps precisely,
then you can and will have four ways to get your debt under control.
Step 1. Stop Spending and Start Saving
The reason you got into this position in the first place is because you
were doing more spending than saving, or spending beyond your means. Stop
using your credit cards to fund your entertainment expenses. No more financing
new furniture. Focus on the debt you currently have and figure out a plan
of action to pay it off before you have a major financial crisis.
Please proceed to Step 2.
Step 2. Figure Out a Plan of Action
Organizing your debts is the key to figuring out a way to pay them off.
If you don’t know where your money is going and who to pay, then
you’ll be digging yourself deeper into the hole. List your bills
by the debtor and how much you owe. Once you have double- and triple-checked
your list, organize the debt from smallest to largest and, if possible,
include the interest rate.
Once your plan of action is complete, proceed to Step 3.
Step 3. The Snowball Plan
The snowball plan is simple: Make minimum payments on all of your debts
except for the smallest bill (which is why we made a list earlier). Throw
any extra money that you have and pay off that debt completely. Once the
smallest debt is paid off, use the minimum payment from that debt to pay
off the next smallest bill. That way you’re snowballing your payments,
which allow you to pay off your debts more quickly.
For more information on the snowball debt consolidation plan, please visit
The Debt Snowball Plan.
Proceed to Step 4.
Step 4. Plan for the Future
By following the snowball plan, you should be completely debt free in less
time than you would take trying to make several overpayments to all of
the debts at once.
At this point, the best way to keep from having debt issues is to have
an emergency fund of $1,000. Most people acquire debt initially because
they had an unfortunate emergency that caused them to have to borrow money
or finance their way out of the situation. Having emergency money put
away for such occasions allows you to the freedom to use your own funds
without eventual repercussions. SaveAndInvest.org has a great step-by-step
process that shows you exactly how to set aside specifically for your
family's emergency fund
Those are just "4 Ways to Get your Debt Under Control" and snowball
your way to financial freedom. If you have any questions about obtaining
your financial freedom and want to seek the help of a certified financial
professional, then don’t hesitate to contact us