When I realized how much debt I had accumulated and how hard it was to pay my bills, I started day dreaming of the moment in time when I could wipe this stress away and pay off my debts. There had to be a better way to live my life without all the stress of this credit card debt. I dreamed of not only paying off my credit card debt but also my long term debt like my house and those student loans that have lingered on my back for years.
I clearly understood that just thinking or dreaming of what my life would be like if I could pay off my credit card debt would not get me closer to my goal. The only thing that changed it from a thought to reality were the action steps I took to make it come right. I sincerely hope that what you are about to read will get you motivated and moving in the right direction to learn how to get out of credit card debt.
Pulling It All Together – The Beginning Steps I Used To Pay off My Debt
First things first. What you need to do is gather a tally on all of your bills and your monthly income. We only want to look at the amount from your paycheck that you really bring home. Use your credit card statements and bank statements to help you compile this list. For each one of your bills I want you to find out the following:
1. List the amount of each of your debts
2. Write down your monthly payments
3. Write down the length of time you have left to pay each bill
4. Write down the interest rate you are paying on each debt
5. List your household expenses
6. Write down the monthly amount of your paycheck (the amount you bring home)
Add up all of your debts (number 1) and you will get the total amount that you owe for all of your debt. Yikes!! This sometimes can be quite an alarming number. Don’t despair. Keep forging ahead because this information is critical to your success.
Add up the monthly payments (number 2 above) for each of your debts and this will tell you the total amount of monthly credit based payments you make each month.
Add together your total monthly credit based payments (number 2 above) and the total amount of your other expenses (number 5 above) and this will tell you the total amount you pay out each month.
If you take the monthly amount of your paycheck (number 6) and subtract from it the total amount you pay out each month; any surplus will be used to knock your debt load down.
From this exercise hopefully you will learn that your bring home pay is more than all of your expenses and that you do have extra money to pay off your debt.
Now that you know this information it is time to place a plot in place, a family budget, so that you can immediately start on your journey to become debt free.