Paying Off Debt is Juggling Finances But There's Light At The End of the Tunnel

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Paying off debt? That's the last step before we can start investing. Did we really get this done? Yes, we did. How? With grit and determination, that's how. We followed all the sound steps we could. Let us look back and see how we really got it done.

Remember how we paid our bills before we made up our minds to get rid of it? We just paid the minimum, that's what. And our creditors loved the way we were playing the game. It was more money in their pocket. It was the game they wanted us to play and we played along with it.

Not anymore, once we made up our mind. How did we do it when there was no extra cash on hand? Well we just sacrificed and stopped eating out twice a week. That saved us $60 a week for a whopping $240 a month. That's how we were able to double our $120 minimum payment due on our Visa bill.

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Paying off debt this way involved quite a sacrifice but it was better than seeing the debt balloon into an unacceptable amount. Anyway, it was better than worrying over the mounting bill and feeling scared to open the bill each month.

Remember that at that time we were sending extra mortgage payment each month because we love the idea of owning our own home sooner? But later we found out this was ridiculous because the interest on the mortgage is not only lower than the credit card interest but it is also deductible. We stopped this nonsense and sent the money to the credit card company that charges 18%.

As we were paying off debt, we followed all the rules. One of the rules was not to incur anymore debt. We hid the credit card and didn't take it with us when we went shopping. That way, we were not tempted to add new debt. We didn't need anything anyway. We had all the clothes we needed and then some.

Since the debt that would take the shortest time to pay was the credit card bill, we faced that challenge first and just paid the minimum to the other two that we owed. Then when we finished paying off the credit card, we used the amount that we were paying for the credit card and applied it to our next creditor.

At least our case was not a hopeless one. That was because we tackled it as soon as we saw we were going to be in trouble. We didn't throw away the bills into the garbage hoping it will go away. We knew we had to do something about it and we did finish paying off debt.

Paying Off Debt Requires Three Main Steps

Paying off debt needs some work. There is a need to look at the big picture of the three main steps. These are: stop getting into more debt, start an emergency fund for a rainy day and then employ a plan of action to pay off debt. The first step is easy; anyone can do it in one day. Just don't buy anything that's not a basic necessity.

The second step will take time but has to be done because if you can't take care of an emergency, then the debt will fall behind again. Have a garage sale and use the proceeds for an emergency fund. The third step is the hardest one but with determination and sacrifice to follow a plan of action, it can be done.




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