Being in debt can be a stressful experience. No matter what your circumstance is, if you signed for a loan, you are obligated to pay it back even if you have a life-altering experience like losing a job, getting into an accident, or even if you have increased expenses due to having a child.

Sometimes debt can just be an unintended consequence of too much holiday spending — or overspending any time of year. Many people try to get out of debt, but life slaps them in the face hard enough that they give up. But that doesn’t have to be the case. There are so many people who are getting out of debt every single day, and not only that, but they are getting out of debt in a short period of time.

So if you’re ready to get on a path to financial freedom, it’s important to have a plan for how you’re going to tackle that debt!

1. Make a conscious decision to stop borrowing money

If you want to get out of debt fast, you have to stop using debt to fund your lifestyle. This means no more financing furniture, no baseless drinking and lavish lifestyle, no more test driving brand new cars that you don’t have the cash to pay for. This will help you focus solely on the debt that you currently do have so that you can develop a game plan to pay it off quickly.

2. Create a realistic budget and stick to it
Developing a budget that tracks your income and your expenses is crucial to getting out of debt in a short period of time. It will help you gauge where you are with your finances so that you can move forward toward your goal.
Creating a budget will expose whether you have money left over, which is called a surplus, or if you are in the negative, which is called a deficit. The goal is to increase your surplus and use that money to pay down your debt.

[center]Below are two ways that you can do this.[/center]

The first way is to earn some extra cash. If you are in a commission-based job then this means that you need to make more sales, which will probably involve having to work more hours. If you are in a salary job and you are limited in the hours that you can work, then you might need to pick up a second job.

The second thing that you can do is trim your expenses. Go over each line item on your budget and ask yourself, “how can I make this number smaller?” It may involve cancelling services that you rarely use like a gym membership, Netflix subscription, etc. It might even involve reducing the amount of times that you eat out at restaurants each month. The amount that you slash depends upon your commitment level to getting out of debt. The more committed you are, the easier it will be for you to give up some of the unnecessary amenities in life. You might not even need to sacrifice much if you can find these items or services for less.

3. Organize your debts

This is paramount to mapping out a plan to pay off your debt. There are two approaches that are worth considering. The first is where you list your debts smallest to largest regardless of the interest rate.

The other method is called laddering. The way it works is you list your debts, starting with the highest interest rate first and end with the debt with the lowest interest rate. This method makes the most mathematical sense, because you will save the most money in interest over time. Regardless of which process you choose, the key is to stick with it.
If you choose laddering, put as much money as you can each month toward the debt with the highest interest rate, while still paying the minimums on the other debts. Once that debt is paid off, move on to the debt with the second highest rate and so on.

One other thing: if you have one or a few small debts you wipe out completely, go ahead and do that. That will give you some tangible progress to get started — and then start tackling the debt with the highest interest rate.

4. Throw any excess cash at your debt

Some good examples would be a tax refund, selling a car, an inheritance, winning a bet, etc. The more cash you can put towards your debt, the faster it will disappear.

Debt doesn’t have to be forever. Develop your financial game plan and start your journey toward being debt-free today.

Cc: Dominique, FOD
Source: http://clark.com/personal-finance-credit/how-get-out-debt-quickly-5-simple-steps/

If you've ever gotten out of debt, please share experiences on how you did it.

The Worst is to Be in debt, and not have any job that could help you return it.

nice write-up...but the way some debtors behave sometimes ehn

Nigerian debtors dey on another level! Most people gots to result to the dirty way (police intervention, thugs intervention) before dey can get their money back

The cause of debt can also depend on the part of the world we 're talking about.

In most advance countries, the worst culprit is the fact that you can basically get most things on credit. Think of how easy it is for someone financing furniture

The easier it is to get somethings on credit, the easy it is to have one's head dipped under the water..

Love this post