10 Step Recovery Plan For Getting Out Of Debt Fast!

You’re in debt up to your ear, the phone never stops ringing, and your mail box is loaded with requests for money.  How are you going to get out of debt without losing everything?  Good question and here’s your 10 step recovery plan for getting out of debt. 

Getting out of debt is one of the hardest things to do.  By the time you realize it you’re in too deep – it’s too late – you’re in over your head.  Credit cards, financial aid, raising kids, and everyday living can rack up the bills quickly.  Now’s the time to take the first step in become debt free. 

Step one: Save and Budget – start adding money to an emergency fund.  Start a savings account and put in a little bit every payday.  Pay yourself a percent of your income.  It doesn’t matter if it’s 1% or 20 %, every little bit helps.  Use it for emergencies only, not for paying bills you can’t afford. 

Step two: Cut Spending — stop buying every little thing you think you might need.  Think downsizing!  Get a roommate, buy ground beef instead of steak, and buy rice and noodles instead of pizza.  It’s all going to be there after you get your finances under control.  You’ll be surprised at what you don’t miss. 

Step three: Track Spending – use a notebook or something like Quicken and track what you spend, every time you spend.  You’ll find more ways to cut costs.  It’s the little spending that adds up, not the big spending. 

Step four:  Set Your Goals – set your financial goal and stick with it.  It won’t take that long to get your finances under control once you set your mind to it.  The time spent will show you how much “stuff” you really don’t need and put you on the path to financial security. 

Step five: Take a Second Job — this depends on your situation.  Sometimes it’s easier to get a second job for a few months but other times it’s not worth it due to responsibilities such as child care or travel expenses.  Only you can decide if another job will help more than hinder. 

Step six: Pay Off Debt – start by paying of the high interest rate liabilities first then work on the lower rate bills. As long as you send money to any bill they will accept it even if they charge you for late fees.  In the long run, paying off the high interest debts first will save you a ton of money. 

Step seven: Pay through Online Banking – by using online baking you save hundreds of dollars in stamps and envelops and late fees if the mail doesn’t get there on time.  You can set them up to pay automatically on the correct day or you can pay manually if you want different amounts. 

Step eight: Credit Scores/Reports — find out what your credit score it.  You can check your score and watch it get back to normal as you reduce your debt.  It will allow you to get a car or home loan in the future.  Always think to the future while settling all your debts. 

Step nine: Fix the Errors –yes, it takes a mammoth amount of time to fix errors on your credit report .  However, in the long run it will be more than worth it.  You have to write letters to the company that is reporting the error, then you need to send to the credit bureaus and it all takes time.  If you hang in there it will be over before you know it. 

Step ten: Keep up the Good Work – after you get your finances under control evaluate your finances every 4 to 6 month just to make sure you’re still on track.  You know it’s easy to loose control, so keeping tabs on your finances will help keep you out of debt.  

After you finish all the steps to get out of debt then give yourself a pat on the back.  The hardest part in becoming debt free it recognizing you’re in debt and doing something about it.