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The Seven Steps to Getting Out of Debt

By: Charrissa Cawley

There’s an untapped world of wealth potential for you in real estate investing, but to fully tap that potential you need to position yourself as favorably as you can. If you’re struggling to make ends meet because of a mountain of debt, it’s time for you to get serious about the burden you’re carrying around. Debt is to your finances what fat is to your health, so you need to attack what’s killing you so you have the flexibility to reach your real estate investing dreams. Here’s a simple seven step process that will get you back on track and free up additional resources for building real estate wealth.
1. Make the commitment – If you’re overweight, you know you didn’t wake up one day 75 pounds heavier. Guess what? Debt is the same way, but instead of packing on pounds one forkful at a time you piled up excessive debt one “easy” payment at a time. The key to regaining control of your finances is to acknowledge that you have a problem and that you’re committed to taking the steps necessary to get out of debt – regardless of how much it might hurt.
2. Pay Cash – One of the quickest and easiest ways to begin the process of reducing your cash burn rate is to quit spending like a Congressman. Don’t use credit cards for any reason. You might think you really need something, and the fact that it’s on sale might make you feel justified in making the purchase. Guess what? You might save 20% by charging it, but you’ll save 100% by forgoing the purchase altogether. If it’s a genuine need, do what your grandparents did: find the cash to pay for it or live without it.
3. Budget Your Expenses (and track your progress) – You can’t expect to win a game if you don’t know what the score is, so budget your monthly expenses and track your progress. Are you consistently going over budget on something? If you are – increase it. If you find you have a consistent surplus on a budget item, apply it to a debt; you’ll have something to show for it.
4. Prioritize Your Debts – You can’t expect to dig yourself out of debt if you don’t know how deep the hole is. List all of your debts in order of importance. Obviously the most important debt you have is your mortgage payment followed by your vehicles. After that, list your other debts – largest to smallest.
5. Reduce Your Interest Rates – Make reducing your interest rates a priority to helping to pull you out of debt. Call your credit card companies and ask for a lower rate. They aren’t predisposed to dropping your rates because of your friendly disposition and your sense of humor, but they are motivated to keep your business. If they think there’s a chance you might close your account and take your business elsewhere – along with your balance – they might be a little more inclined to reduce your interest rate. If not, you might consider transferring your balance. As a real estate investor, you’re used to negotiating. Put your skills to work.
6. Plan, Plan, Plan – It’s been said that failing to plan is planning to fail, and it really is a true statement. Start paying extra – every spare dollar you can – on your smallest debt while paying the minimum monthly payment on your other debts. This advice runs contrary to what some so-called experts advise (who recommend you start working on the debt with the highest interest rate. That’s all well and good, but psychological victories give you the motivation you need to really accelerate your efforts. Be a motivated payer and reap the financial rewards.
7. Follow through – If you’ve ever dieted, you know the temptation to cheat can be overwhelming at times. Debt reduction is no different. Remember your commitment, your goals, and what you’re trying to accomplish. If you do cheat, make it a small one. Enjoy the splurge and do it without guilt. Then immediately get back on track before you fall back into your old habits of spending too much and adding to your debt burden.
If you follow my advice you’ll begin making visible progress as you reduce your level of debt. Every time you pay off a debt, take a marker and scrawl “Paid in Full” across the top of your billing statement – and keep them together in a nice stack. Then, when your last bill is paid and you’ve reached your goal of being debt-free, call your kids into the room, cut the bills up into tiny pieces and have a confetti party. When you’re done, put the kids to work cleaning up while you start planning your next real estate conquest.
If your kids complain about the unfairness of it all, pat them on the back, smile, and remind them that membership in the debt free club has its rewards!
Charrissa Cawley has a long standing reputation for excellence as a gifted speaker, real estate trainer and wealth coach. Her strength lies in training entrepreneurs in the areas of real estate, investing and financial literacy. Her passion is bridging the gap between learning and doing. She has helped thousands of entrepreneurs all over the world seeking financial growth by equipping them with the tools, resources and specialized knowledge to succeed. Charrissa offers accurate and proven strategies to investors of all different levels and is the founder of www.reiconferences.com, one of the fastest growing real estate investment training organizations in the US in addition to www.rewexclub.com , the top rated Real Estate Investor Community on the web today.

Article Source: http://www.articles4meandu.com

Charrissa Cawley offers accurate and proven strategies to investors of all different levels and is the founder of www.reiconferences.com, one of the fastest growing real estate investment training organizations in the US in addition to www.rewexclub.com , the top rated Real Estate Investor Community on the web today.

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