Getting out of debt and staying out of debt is not easy. ten-step plan to getting your finances back under control.

2. 10 Steps to a Debt Free Life
Carrying debt creates stress, especially when large
amounts have been accrued over the years. Debt
has a way of creeping up on you, rather than
coming from one or two large expenses.
Regardless of whether it came from a year of
unemployment, a sick family member or
overspending, a conscious effort must be made to
eliminate debt, or it will remain a burden. Many
have lost hope of ever being able to live a debt
free life.
This step by step strategy will help you get
organized, set obtainable goals, and implement
the plan to become debt free. For everyone there
is hope and success can be yours.

3. Step 1:
Stop increasing your debt. A major challenge with
family finances is stopping the leaks in spending
that have led to high amounts of debt. One of the
most effective ways to stop increasing debt is to
operate with a cash only budget.
Paying with cash will result in an increased
awareness of how much you are spending on
what and has been known to reduce monthly
spending by up to 20%.

4. Step 2:
Assess your current situation by tracking spending
for 30 days. While this may seem tedious it is the
centerpiece for any debt reduction plan. How can
you improve your finances if you don’t know how
much is spent each month? Tracking spending will
bring to light the total cost of living and how to
prioritize expenses. It will also help evaluate
where savings can be found.
A good place to start is with a free copy of your
credit report at www.annualcreditreport.com
you’re your credit score. This will help you create
a list of all debts. On your list of all your debts to
include: who the debtor is, how much is owed,
interest rate and minimum payment due. Don’t
forget to include quarterly and annual bills that
come due.

5. Step 3:
Review spending patterns and divide expenses
between essential bills (like mortgage and power)
and the discretionary spending (like clothing and
entertainment).

6. Step 4:
Review income and look for ways to increase it.
How much do you have coming in each month
compared to what is going out? Does the income
fluctuate each month? What expenses fluctuate?
Is the number at the end positive or negative? A
negative number indicates you are increasing your
debt each month to pay all your expenses. A
positive number means you have extra to build
savings and pay down debt.
Income can be increased through a second job,
freelance work, side jobs, or selling things you no
longer use. One painless way to increase income
is to evaluate your w-4 withholding. If you
received a refund in the previous tax year, you
can increase with holdings and end up with more
cash in each paycheck. When you get a refund,
you have given the IRS an interest free loan.
Putting more in your paycheck can be put to good
use if it is advancing your goal to live a debt free
life.

7. Step 5:
Trim the fat. Closely look at spending and
determine ways to cut back. Often it is the little
things that add up. There are a 101 ways to
reduce costs. The key to success is to cut back a
little in a lot of areas.
If you try to eliminate every extra expense you
will not be able to keep it up and make a lifestyle
change. For more specific ideas on trimming
spending see
http://financesolutions.org/debt-by-a-thousand-cuts/.

8. Step 6:
Build an emergency fund. One of the challenges with
debt reduction is that unexpected expenses always
come up. If you don’t set aside a little each month to
build up savings, you will incur new debt every time an
unexpected expense occurs.
To learn more about ways to quickly get some extra
cash visit
http://financesolutions.org/fast-ways-to-build-an-emergency-fund/

9. Step 7:
Establish a budget and stick to it. A successful
budget is a realistic budget. Set goals that are
both achievable and measurable. Track spending
each week to determine if you are on track or not.
This allows you take immediate steps to correct
overspending. Once good habits are established it
can be monitored less frequently.
When it comes to a budget think long term. Just
as crash diets do not work, crash spending plans
don’t either. When you change spending patterns,
living a debt free life will soon become a reality.
During the period of paying down debt, take
additional funds received and put it towards
paying creditors. This period of time will be one of
sacrifice, but it will be worth it in the end. You
may have to forgo vacations and entertainment
for a short time in order to stick with your plan.

10. Step 8:
Lower payments. One of the fastest ways to lower
payments is to call creditors and ask them to lower
your interest rate. If you have paid the bill on time,
many creditors will lower the rate. Even a few points in
interest will result in big savings.
Another way to lower payments may include
consolidating debts.
See http://financesolutions.org/debt-relief-options/debt-consolidation/
for more specifics on benefits and qualifications. If you
have student loans you might be able to consolidate
the loans, extend the payments or move to an income
based repayment structure. All of which can reduce
monthly expenses.

11. Step 9: Look at repayment options. If you have enough
income (or can reduce monthly expenses or increase
income) then you have two viable repayment
strategies.
 The first strategy is to list your debts in order of
balances from lowest to highest. Make minimum
payments on all debts except the one with the
lowest balance. Take all extra funds and put it
towards that account until it is paid in full. This will
give you fast results and more incentive and
motivation to stick with the plan.
 The second strategy is to list debts by interest rate
paying off the highest interest rate card first. Make
minimum payments to all debts but one and pay
extra on the account with the highest rate. This
will result in paying less interest over time, but it
may be longer before you see the first account
paid off.
If you are unable to make even minimum payments and cannot find
ways to raise income or lower expenses, it may be time to call in the
professionals. Credit counseling and debt negotiation companies like
Finance Solutions offer a free debt evaluation and can discuss
options that will reduce debt payments to a monthly amount you can
consistently pay.

12. Step 10:
Set a schedule of 3 to 5 years for debt freedom. Over
the course of this time your spending habits will
change and you will find you can live a frugal life
without it feeling like a sacrifice. When you become
debt free you will have more money to spend on the
things that matter. This might mean starting or
increasing investments for retirement or your
children’s college funds. It might mean taking a
vacation each year without adding new debt.
Living a debt free life is a freedom many people desire,
but few are willing to implement the disciple necessary
to achieve it.

13. Get Out of Debt By Financesolutions.org
For a Free Financial Analysis Call
855-331-4852