Many people are looking for ways to get out of debt. But getting out of debt can seem like one of the most difficult things in the world to do. Did you know that according to a U.S Government study, 96% of Americans will become financial failures by retirement? A lot of this has to do with debt. Read on and discover some debt free solutions that can help turn your situation around.
Why do people fail?
According to the same government study, the reason people fail is they want everything now. So instead of saving up for an item, many people use credit to get it. In fact, a lot of people take advantage of "buy now, pay later" deals. The problem is that later comes faster than most people think and they don't have the cash to pay it off. This is the main reason that consumer debt is at record levels in our country.
But understand that you're not to blame. The credit industry has put many people into this position by offering "no interest until next year" and "easy monthly payments." They realize that most people won't pay it off after awhile. They know that they'll make a ton of profit off of the consumer with outrageous interest charges that are designed to take every dime of your money!
How about some proof?
If you have a mortgage, you'll end up paying about 3 times the purchases price of your house with a 30 year loan. So if you buy a house for $200,000, then you'll really end up paying $600,000 for that house! The banks collect all of their profits in interest which leads to such a jump in price.
How about credit cards? If you were to charge $2,000 on your credit card, how long do you think it would take you to pay it off? Maybe a few months? Here's the answer. If you charged $2,000 and you only made the minimum monthly payments at 19% interest, it would take you over 31 years to pay it off! You would pay over $8,000 in interest alone!
So what are some debt free solutions?
You need total debt elimination.
How?
First, make a list of all of your debts, including credit card payments, car payments, and your mortgage. Write down your balance and the minimum monthly payment on each one. There are many ways to pay off debt, but the best way is to start paying down your smallest debt first. This is because you'll stay more motivated. You'll have success much faster by getting rid of a smaller bill rather than a larger one. Usually, you'll list your credit cards first, then your car payments, and finally your mortgage.
The key is to focus on paying one debt at a time. Decide to focus on the debt with the smallest balance and start paying it down. After you have paid the first debt, then use that money to start paying off your second debt.
For example, if your first credit card bill had a minimum monthly payment of $65 a month, you would pay extra on it until it was gone. Now, after paying it off, you'd take that same $65 a month that you were wasting on the first bill and apply it to the second one. Of course, keep paying the minimum payments on all of the rest of your debts while doing this.
By the time your credit cards and car payments have been paid off, you'll have a large amount of money to pay off your mortgage. So the process is simple. After you pay off the first debt, then you eliminate the second one. After you pay off the second debt, then go after the third. After each debt if eliminated, you'll have more money to pay off the next one. Keep this process up until all of your debts are gone!
By following these debt free solutions, you can have a debt-free, stress-free life and be in more control of your money.
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