Sunday, 10 February 2019

The Best Way To Pay Off Your Credit Cards Debt Faster

Credit card debt is bad and I don't care what you're telling yourself, most of us feel we're in debt deep down if you peel back the layers there are feelings of remorse, embarrassment, shame and it just drains you of your energy in your resources, so we need to make a plan to get you out of credit card debt ASAP and this is exactly what this article is going to be all about. I pretty much guarantee that most people who are in credit card debt can't even remember half of the things that they bought on their card and I'm going to guesstimate, 

Step 1: Cut The Card and Throw It Away

If you are in multiple credit card debt you have to cut all the cards up and throw them away. By doing that, you've trapped the debt, you can't use the card and you can't let the debt any bigger assuming that you maintain the interest repayment. By cutting those cards you've trapped it, it cannot get any worse and you can't use them anymore, don't forget it very important

Step 2: Pay For Everything In Cash From This Point Forward

This is going to be a little bit painful because you're going to have to say no or say that you can't afford to do a few things but that's okay, it's not the end of the world you're not going to die, you're actually doing something much more powerful and beneficial for yourself and you're not let your credit card debt get any bigger

Read: How To Quickly Pay Off Your Debt With Little Income

It's actually going to start getting smaller soon, so pay everything in cash or if you need to use your ATM debit card, there's no credit at all that you're using. 

Step 3: Start A-List

I want you to take a piece of paper and I want you to write down everyone that you owe money to, and exactly how much. Start with the person that you owe the least amount of money first, work your way down and the last person on the list should be the person you owe the most amount of money to. Take that piece of paper either put it on your bedside or your toothbrush or even in your wallet. Basically, somewhere you're going to see that piece of paper a couple of times a day. This is really important and I'm going to explain how this is going to help you keep focus and motivation

Step 4: Do A Budget

Most people hate doing budgets, they put them off as long as possible but I guarantee you once you sit down and write down all your living expenses, it's actually an incredible awakening experience because you have a lot of ideas, a lot more control over where your money goes and you can see where the money's being wasted and where it's not. About doing a budget, you can see what you really value and you can then identify things that could potentially be cut out to help you to save more money or help you get out of a credit card debt faster. If you've never done a budget before, you don't even know where to start, you find the whole thing completely overwhelming.

Step 5: Cash Flow

Now you have an idea of exactly how much debt you're in and we also have an idea of your living expenses. We need to get you into a situation where you have control of your cash flow so that if the big months come through, you got lots of expenses you don't have to go back to the credit cards to rely on you. You have cash available to help you stay in control. This is how you run your accounts, I want you to have two accounts. One being your everyday bank account which is where your salary gets deposited and where you pay for your monthly or fortnightly expenses

Then I want you to have a second account and this is a saving account which I want you to build up with money like Christmastime where you buy a dozen Christmas present for family and friends. What you are going to do is stockpile that account so when those months come you will get enough cash set aside to pay for those things and you're not reaching for the credit again to get you through, you pay for that in cash. This will keep you out of debt for good, that is what I want you to do going forward even when your credit card debt is paid off

Step 6: Start Paying The Debt Down

This is the most important and powerful step you need to use, what I want you to do is grab your little piece of paper, go through your budget and I want you to work out each individual expense and question the value of that expenses and whether you really need it. The more expenses that you can cut out of your budget the faster you're going to get out of credit card debt. So go through the budget and look at what each one individually and sees which ones you can cull even if it's only temporarily 

  • Say for example you identify some savings and you can free up say $300 a month out of your budget. Take out $300 and start using that as lump sum repayments on your debt
  • Starting with the number one debt at the top of your piece of paper, go through the budget, analyze what you can call and try and free up some cash flow which you would then go to channel into reducing that credit card debt

A lot of you are probably wondering why I'm recommending this strategy of starting with a smaller step first and then you going through to the biggest debt last, especially when all the banks say no, consolidate the dead or start with the loan that's got the highest amount of interest. What I learn from experience in coaching people out of debt and working with building wealth is, credit card debt as I said it's very toxic and it's actually quite hard to manage when you've got numerous debt, like juggling a ball. Let say you've seven balls then you take one ball out of the air and you're only juggling six, is going to be a little bit easier, so I need to try and help you get those as many balls out of the air as quickly as possible

By starting with the smaller debt first, focusing on that we're quickly reducing the number of debts and making it easier.

That's it, folks, that is how you get out credit card debt and hopefully, you learn something new

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