How to Get Out of Major Debt
- 1). Take inventory of your debt. Pull out credit card statements and other debt obligations and make a list of their balances. Looking at your entire debt load might be tough, however, it's important to understand exactly how much you owe.
- 2). Understand the habits that got you into debt. To pay it off and keep it paid off, you'll need to understand how you got there in the first place. For example, habits like eating out, buying coffee every day and going on shopping sprees could be landing you in hot water. If so, it's time to work on changing those behaviors for long-term success.
- 3). Make a list of your highest-interest debt obligations. These cost you the most money in interest payments each month. For example, if your highest-rate credit card is 18 percent, focus all your extra funds on paying off this card. Make the minimum payment on all other credit cards until the highest-rate card is paid off. Then, switch your focus to the card with the next-highest rate.
- 4). Find extra money to pay off debt. Make a list of "extras" you're spending money on each month. For example, a $5 coffee bill each day could save you $155 each month. Start putting this money toward paying off debt instead.
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