Dear Olga,
What is your best advice to get out of debt?
Thanks,
Jack Carter
Dear Jack,
My first piece of advice for getting out of debt is: commit to no new debt starting today. Many people say they want to get out of debt, but continue to add new balances to the old balances carried over on their credit cards.
This means you should be prepared to pay for everything upfront, in cash. If you don't have enough cash, this may be a sign that you're spending more than you make.
The second step is to list all of your debt, this will show you the total debt you're working with. Next to each amount also list the minimum payment due for each account, this will show you how much you have to pay in minimum payments each month. Keep in mind this is the bare-minimum effort to stay current with your debt.
If you don't keep a monthly budget, start this budget today. You can find a free budget template here on my website. If you have never kept a budget before, here is a "Dear Olga" post that lists the steps to take to put together your first budget.
A budget will help you see how much spending cash you have each month and if you have any extra amounts to add to your minimum payment each month to help you pay down your debt more quickly.
My last tip is, consider using a debt snapshot to track the progress you're making with paying down your debt. A free template of a debt snapshot can be found here on my website. This will help you see the progress you're making each month, will motivate you to keep going, and give you the confidence that you can do this money thing!
If you're struggling with starting this process, here's a link to my calendar 🗓 Let's hop on a quick call, let me help you 🤗 No pressure to sign on as a client, just a short call to give you a few practical and actionable tips to help you find your path to financial independence.
Good luck!
Olga