Have you ever watched a football game where one of the defensive players makes a HUGE tackle and crushes his opponent? How would you like to do that to your debt? Wouldn’t it feel great to tackle one of the biggest stressors in your life? For most people one of the biggest causes of stress is finances. And the main reason for being stressed with our finances is debt. Here are five ways you can tackle your debt and turn the game of life into your favor.
- Stop Borrowing – If you are serious about wanting to get out of debt then you must have an emotional shift in how you look at money.
- Create a Game Plan – A winning sports team creates a game plan for each team they play against. Likewise, you will want to create your own game plan called a budget. Every month create a budget based off the coming month’s income and expenses. Be sure that your budget balances (meaning income – expenses = zero)
- Emergency Fund – Life happens. If you took the stop borrowing money step seriously you are going to need some pad between you and life. Quickly get a $1,000 and call it your emergency fund. Then remember the only time you use your $1,000 is for emergencies only (otherwise someone will need to throw a penalty flag at you for misuse of funds).
- Debt Snowball – List all of your debts smallest to largest based on balance, everything except the house. Pay minimum payments on all of your debts but the smallest one. Then take all of your money that you have left over and pay down the smallest debt. Repeat the process until all of your debt is gone.
- Extra money – You will quickly realize that just lowering your going out to eat money and cutting cable is not enough. The fastest way to get momentum going in your favor is to make extra money. Working overtime, finding a part-time job and selling stuff you really do not need are some great ways to pay off debt quickly. You may thing that stinks, but so does being broke.
It is hard to win with money and it is hard being broke. If it is going to be hard either way, choose winning with money. Just like in all sports, winning teams sacrifice to win.
What have you sacrificed to pay off some of your debt?