The Complete Guide To Get Out Of Debt

Comprehensive Guide To Becoming Debt Free

The majority of people have a lot of debt – in fact our whole way of living revolves around debt and credit. So how do we solve this problem? How can we really become debt free? For most people debt freedom is an unrealistic fantasy. Lets figure out how to get out of debt!

Is Debt Bad?

Why should you want to get out of debt? Is it bad? For the average person, debt is a horrible thing to do financially. Why? Because when you take on debt you borrow from your future – that is, you create a time in the future you need to spend less than you make so you can spend more than you make now.

Debt makes you a slave, because now you have to work for what you bought now in the future. It also is very expensive, but banks hide this by making the term of repayment long enough to seem cheap. In a traditional mortgage you will nearly double the cost of your house!Total Interest Paid on a mortgage for a $200,000 house

The picture to the right is how much a $200k house really costs, over 30 years you’ll end up paying about $155,000 in interest! So really the house costs $355k instead of $200.

That interest adds up to 77% of the original loan, this gets even worse as interest rates go up. These numbers are calculated on a 4.25% interest rate.

In fact, I just learned by playing with the numbers that an interest rate on a traditional 30 year mortgage of 5.3% is 100% the original loan and anything over that means you’ll pay more for the house in interest alone!

Can Debt Be Good?

Debt isn’t all bad, it actually can be good. But this is only the case if you leverage debt for something that can increase your income more than the interest rate of the loan.

Such a case is a lawn care company who upgrades from a push mower doing 5 lawns a day to a bigger wider mower allowing the company to mow 20 yards a day.

Other than increasing your income debt should be taboo.

How To Get Out Of Debt?

That’s all great, but if you’re like me it’s probably too late. So what you want to know is: “how can I get out of debt?”

To be completely honest is going to take a great deal of effort and time. However to help you save time and stress I’ll point you to some amazing resources to help out. I promise you it will be worth it – the feeling of being completely debt free is incredible. I had no idea how good it would be until I got there. But the path was harder than I thought, too.

Do Not Take On Any More Debt!

This should be simple, but to be good at anything you need to master the basics. Do not take out any more debt for any reason (barring some severe issue or something).

By not taking out any more debt your situation will only improve. Every month your debt load lessens and lessens and you have more and more breathing room.

I live by a rule that a rich person told me: “If you can’t pay cash for it, then you don’t deserve it”. Of course with everyone making it so easy to finance anything it’s pretty hard to follow through with that. But if you can, man you’ll see changes so fast!

Snowball Your Debt

When I was a kid, I use to love taking a snowball and rolling it down a hill and seeing how bit it would get. You can actually apply this to your debt situation, and I feel it’s the easiest way to pay off debt. This is actually the main method I used to become debt free.

It’s extremely easy to follow and it’s power is unmatched. You take your smallest loan balance and pay it off as soon as you can. Lets say its $800 and $40 a month payments.

After it’s paid off you take the $40 that was going to payments and apply it to the next smallest loan balance. Lets say this next loan is $1100 credit card balance, and you’re paying $25 a month on it.

So now you’re paying $65 a month on the balance. $40 + $25 = $65 Any amount over the minimum payments goes right to principle which is an immediate return on investment.

After that’s paid off you add that amount to the next amount and so on and so on until you’re debt free.

Lets say you have a mortgage and you’re paying $984 a month for it. Using this method you could be paying a crap ton more.


Your debt are as followed:

Small Personal Loan with a balance of $800 and minimum payments of $40

Credit card of $800 and minimum payments of $25

Car Loan with a balance of $15,000 and minimum payments of $380

Student Loan with a balance of $2800 and minimum payments of $520


Mortgage with a balance of $200,000 and minimum payments of $984

40+25+380+520+984 = 1,949

Using the snowball method you will quickly pay off the small loans and be applying $1,949 towards your mortgage! Look how quickly even your mortgage can disappear. All of this without changing your lifestyle and getting debt free!

If you can put any extra money towards this then the engine works so much faster! When you are debt free think of how great that extra nearly two grand will feel!

What If Just That Doesn’t Work?

Now sometimes people can’t actually do this because their situation is so dire. What do you do then? If this is your situation then I highly recommend using a company to consolidate your debt. Why? Because lenders would rather have some of something than all of nothing. So you can actually negotiate a lower interest rate and payments, or a longer term, or sometimes they will even forgive a percentage of the debt.

Debt consolidation can be very risky because it’s so effective. Only do this if you are going to commit to fixing the problem. I’ve seen many people consolidate their debt, and go right out and take out more! That will make the situation so much worse.

You also need to be careful who you pick to help you consolidate your debt, for your convenience here is an extremely highly rated company.

Make More Money

Another great way to help get out of debt is to make more money. Just don’t fall victim to lifestyle inflation – where you make more money and you spend more money.

Of course how do you just make more money? Luckily there are a lot of ways to do that now with the internet. You can work remotely for a company as another job, or do simple tasks for companies. You can learn new skills and designs websites or whatever.

Of course a lot of those take a lot of time and many people are so busy with life they can’t afford to spend numerous hours on that.

I have a few recommended ways to help with that.

Inboxdollars is a fun way to make a few bucks – doesnt bring in a lot of money but dollars certainly add up and it’s free!

Click To Make An Account

Checkout51 gives you cashback for shopping so it’s like killing two birds with one stone, you save money shopping and get paid to do so! It’s also FREE!

Check Out Checkout51

You can even find unclaimed money! There are billions of dollars out there that people need to claim to get. Obviously not everyone has money waiting for them but many do. It pays to look!

You can do it for free by yourself or you can pick up a very inexpensive information rich guide to help you, check it out below.

See If You Have Money Waiting For You

Top Resources To Get Out Of Debt

To protect consumers there are a lot of laws on what debt collectors can and cannot do.

Article Name
Complete Guide to Get Out Of Debt
This is a comprehensive guide to learn how to get out of debt and to become debt free. Also how to stay out of debt forever.
Publisher Name
Financial Fitness Blog
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