Get Out of Debt on Your Own

Get Out of Debt on Your Own

Congratulations!

You have just made the decision that you want to get out of debt on your own. And what now?

Some people never get to this point because they don’t know where to start. The overall picture of finance is so complex for them that they quit before they make first step (or bank transfer to repay their loans). And what now?

 

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Get out of debt on your own

But you don‘t have to worry about it, because you will find the first step on your way of getting rid of debts.

Before I tell you what this first step is, I must warn you: this step will surely surprise you.

At first glance, you’ll even think it’s a bad thing. Most people think they can do nothing about debt reduction (Truth about Your Money and Your Time).

Are you ready?

Ok, so the first step is: Save $1,000 as fast as you can.

Do you admit that you didn‘t expect it? Be sure to ask why you have to save money on a stubborn bill instead of using the money you used to pay for your accounts?

 

Why choose saving instead of repaying?

Because accidents are part of life.

If you have $1,000 emergency fund, you will not have to be indebted any more when an unexpected event occurs. Take this fund as your safety net.

 

Start your emergency fund

When you’re really determined to get rid of debt, start working hard to save $1,000 as quickly as possible.

Sell those mysterious things you keep in the attic. Get rid of jewelery you bought just to keep up with your neighbours.

Simply, save every cent you find. Everything counts. (find out more in my article How to Organize Paying Your Bills).

When you reach target amount, take money to bank. Do not leave them at home because you will spend them and will not be able to get out of debt on your own.

What for? For example, you forget to withdraw money from ATM for school trip. Or you need to buy a gift for colleague who leaves the work.

Therefore, instead of having money at home, open a savings account at bank that is separate from your current account.

Dont touch it! It’s just for emergency. And no, the sale in your favorite store is not an emergency.

 

Prove that you can do it.

This step demonstrates that you can save money. That you control your behavior.

 

Source: full article in Slovak language

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