Is it really possible to get out of debt?  Absolutely!!!  I’m someone who has done that so I know it’s possible.  And, no matter how far under you are, you can make a plan to get out.

So where do you start?  You need to look at where you are realistically.  Sit down with paper and pencil and list everything you owe.  List every balance you owe, the interest rate you’re paying, and what the minimum payment is.  If you’re overcome, then it’s time to develop a strategy to pay everything off.  The information you learn from listing all your debts will give you the ability to create a plan.

Next, create an accurate budget.  A budget will allow you to monitor your income and expenses.  You absolutely need to know where every penny is going.  You also need to give precedence to your needs such as your lodging, food, utilities, and transportation.  Any monies not used for those four essentials should be allocated to paying off your debt(s).

In a previous post, I discussed either paying off the smallest debt, or the one with the highest interest rate first.  Paying off the smallest debt provides incentive.  But you’ll save money over the long haul if you pay the highest interest rate obligation first. 

I always recommend calling your credit card companies to request a lower interest rate.  It doesn’t hurt to try. and they might just lower it.  That will save you money.  Additionally, if you can get a zero-interest rate credit card, you can transfer higher interest balances to the zero card. The one thing you MUST do is have a plan to pay it off before the zero-rate timeframe expires.  I do NOT recommend that you use your home as collateral.  You never want to put your biggest investment at risk, EVER!

Moral of the story:

Yes, it is really possible to get out of debt.  It takes focus and tenacity to accomplish but it is doable.  Quit using your credit cards, period.  You can’t afford to increase your debt load.  I know it won’t be easy, but you have to sacrifice to get your debts paid.  Is it fun?  Absolutely not.  But is it worth it?  No question about it.  I sleep at night.  Do you?  If not, it’s time to make a change.