Get out of Debt

Getting Out of Debt
www.lifethenfinance.com

While your mountain
of debt
may be daunting, it's possible
to get to the top and clear
your financial name!

Getting Out of Debt
Credit Cards
Bank Loans
Mortgage

Step 1: Organize Your Debts
Smallest to Largest
• Pay only minimum payments and any left over
money is directed to the smallest debt until it is
paid off.

Step 2: Eliminate Small Balances
First
• If you have a card with a low balance, pay it off
first.
• Then reroute the money for that card’s payment
to pay off cards with higher balances or a
higher interest rate.

Step 3: Take Advantage of...
The
Snowball
Effect

Step 4: Stay Focused
Keep your eye on the your goal. And repeat the process
until all the debts are paid-off.

Step 5: Avoid Skipping Payments
Skipping payments will lead to many extra
fees and harassment by debt collectors!

Step 6: Be Careful when
Considering Debt Consolidation
Companies
There are plenty of scams in
the debt consolidation industry.
You are better off doing all the
negotiations yourself.

Debt Consolidation
• Getting a loan from the bank to pay off your credit
cards can lower your interest rate.
• Read the fine print on credit card offers that entice
you to transfer your higher interest balances to
them.
• Debt consolidation is one more way you can get out
of debt without using any more money than you
started with.

Step 7: Use Windfalls to Lower Your
Debt
Any extra cash you plow into your debt will be
multiplied when you think of all the money in
interest charges it will save you.

IRS Debt

If you owe money to the
IRS, make those payments
your highest priority!

IRS Debt
The Internal Revenue Service can:
• Take your house
• Empty your bank account
• Have you arrested on criminal charges
• Confiscate your business assets regardless of the
fact that it puts you out of business
• And much more!

Student Loans

Student Loans
• Include the student loans as part of your debt
snow-ball
• Consolidate them to avoid multiple payments.

Car Loans & Short
Term Loans

Car Loans and Other Short Term
Loans
• Usually carry lower interest rates than your credit cards.
• To avoid having eternal car loans, make a plan to put some
funds aside so you can pay cash for your next car.
• To lighten the load of another car loan, consider a used
car.

Mortgage Loans

Mortgage Loans
• Assuming this is your remaining
debt. Focus all your extra money
toward the mortgage and pay-off
your home early.

Bi-Weekly Mortgage Plans
• With a bi-weekly plan, you pay approximately
½ of your regular monthly payment every 2
weeks.
• You can pay off your mortgage 8 – 15 years
sooner, saving you many thousands of dollars
in interest!
• You don't need approval from your mortage
company, just send in an extra payment every
month which will be applied to your principle.

Self-Reflection Questions:
• Can I pay off some of these loans early without penalty?
• How can I cut my expenses to speed up debt repayment?

Action Tips:
• Make a written plan for paying off your debts and
then follow your plan.
• Consolidate as much of your debt as possible.
• Pay off the smallest debt first.
• When a balance is paid off, reroute that money
towards another balance.

Get out of Debt

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