Get Out of Debt - FAST!

It can be a challenge to navigate your way out of debt.  For the most part I subscribe to the snowball method of getting out of debt.  But sometimes knowing the right place to begin and understanding how to get out of debt the fastest way possible is a frustrating obstacle to overcome.  Check out a few tips I always give my clients who are looking to finally get free in a short amount of time.

• Stop investing right now.  I know this seems impossible and may unwise to some but it really works for 2 reasons.  It gives you clear motivation for not remaining in debt for a long time.  You don’t want to be out of the market for long periods of time.  This also frees up some cash to put towards your debt without changing your budget.
• Don’t give the government and interest-free loan.  So many people love getting tax refunds but what they don’t realize is that they could be using that money in their budget towards their debt every month.  Check out irs.gov and use the withholding calculator to determine your optimal exemptions so that you break even on your taxes (you don’t owe, and you don’t get a large refund).  Then make the necessary adjustments with payroll so your take-home pay is larger.  Finally, apply those extra funds toward your debt.  If you received a refund this year then put it to good use and apply it to your debt immediately.
• Use cash.  People always ask me what I mean by this.  I mean use cold hard cash for purchases.  You will spend 12-15% less when using cash for your groceries, while dining out, and other general shopping.  Yes, it is partly psychological, but it works!
• Use your skills.  This is a good time to go to work!  We all have gifts and talents that are not being used.  Take the time to figure out what you can do after work and on weekends to earn extra cash.  The more you make the faster your debt goes away.
• Finally, use credit to your advantage.  If you have good credit and pay interest on your credit cards right now, you may be able to transfer balances to another card with a 0% introductory rate.  Check out creditkarma.com and they will show you cards that you could qualify for.

Getting out of debt isn’t easy but it is worth it.  Do all you can to get free as quickly as possible because then you have the freedom to do anything you want with your money!