Cash. Money. You. No Debt.
Imagine what it would be like to be debt free. I’m talkin’ no credit card balances, no student loans and no mortgage. Nothin. Just money in the bank. And you have assets that produce income to cover your monthly nut. This is possible. Really. It’s probably a long way off but with a real plan, you could have this.
The first step is getting out of credit card debt. Ahhh . . . The feeling of having no credit card debt. It’s such a good one. Seeing those zero balances on all of your credit cards will make you feel like a million bucks!!! Gangnam style!
Can we get to work and take care of this pah-leez!!! It’s totally doable.
Here’s the plan.
Step 1 – Take a deep breath!
Step 2 – Identify how much debt you have. Write that number down. The real number, not a ballpark number.
Step 3 – Create a working monthly budget. Get clear on what your monthly living expenses are. I have gone through more than 100 financial plans with clients. The 3 most common areas where spending can get out of control are: shopping, eating out at restaurants, and travel. Don’t get me wrong. I love doing these 3 things. But they have to be done within reason. Instead of using your credit cards for these 3 things, use cash or your debit cards. Literally put the cash in an envelope and use it only for these 3 categories. It will force you to stay on track.
Step 4 – Write down your after tax income. Take this # and subtract your living expenses. Now you know how much additional money you can save towards paying off your debt. Lets make it happen right here.
Step 6 – Pay off the debt with the highest rate first.
Step 7 – Call your credit card company and ask for a lower rate. See if they have a special offer or can work with you on this. Ask for a supervisor. Be nice. Give ‘em the cream and sugar treatment.
Step 8 – Consider a balance transfer to another credit with a 0% introductory rate. If you have more than one card with a balance, see if you can transfer all of your debt to one single card.
Step 9 – Make more money too! If you are an employee, ask your company/boss what you can do to earn more money. See what additional responsibilities you can take on. Call a headhunter. See what else is out there! If you’re an entrepreneur, watch this video. Better yet, come to my next live event in Los Angeles where I will give you 7 ways to grow your business revenue. Don’t spend the additional money you make on a pair of shoes for $400. Use it to pay down your credit cards.
Step 10 – Go to this site and use the calculator to see how long it will take you to pay off your debt. It’s pretty simple. Clarity baby.
Bonus!!!! If you have no credit card debt and are thinking of paying down your mortgage, stay tuned for next week’s post to get the skinny on that one.