Making the Leap to Get Out of Debt

Being in debt is scary.  And, not having the cash you need to pay your bills can seriously suck.  That’s why we go into debt, isn’t it?  That’s why we spend money that we don’t have.  And, it’s ultimately the reason why people do drastic things like selling plasma and taking out payday loans. Big mistake.
Once you’ve gone down that road, it’s easy to continue making the minimum payments and ignore the monumental interest rates and APR’s that most debt collectors will charge.  It’s not fun to think about that kind of stuff and as long as you have enough income to cover your monthly payment.  But, at a certain point, the bubble is going to burst and you’ll eventually be face-to-face with all of the money you owe.
It seems like it’s almost human nature to go into debt: whether it’s student loan debt, credit card debt or a mortgage.  Spending money on high consumption items like vacations, electronics, and entertainment will usually hamper your finances in some way, shape, or form.
But, it’s not reasonable to ask people to stay in every night and eat Ramen noodles for dinner.  Instead, it’s all about finding the balance between saving and spending.

Taking the Leap to Get Out of Debt

If you’re currently in debt, you’re not alone.  Deciding that you’ve had enough is the first step.  You have to be motivated and take a serious look at all of the reason that it makes sense.  Do you want to continue paying payments for the rest of your life?  Or, would you rather start saving for your own benefit…and your own future?
Once you’ve made the decision to leave debt in your past, create a plan to chip away at your debt.  You’ll probably have to make some sacrifices along the way but a smart budget can help you get there.  Trust me, there’s no better feeling than paying off the last of your debts, once and for all.

Alternatives to High Interest Debt

Many people get stuck in the debt cycle and end up turning to payday loans or short term high APR loans.  These are some of the most expensive loans in the industry and if you’re forced to borrow money you should consider the alternatives first.
If you’ve built up a substantial emergency fund, then you can always borrow from your emergency fund to pay off short-term needs and then slowly start paying yourself back.  Additionally, there are certain organizations like non-profits and government-owned options that provide much better alternatives and interest rates for short term loans.
Ultimately, it’s up to you to make responsible decisions once you decide to get out of debt.  The hardest part might be deciding that you want to get out of debt and taking that initial leap though.  From there, it’s all about discipline and staying on course until you’re free from debt.
Why did you decide to take the leap to get out of debt?  Are you glad you did?

 

Comments

  1. This fits perfectly with the post I’m publishing tomorrow! It’s like the debt-free gods are smiling down on me for putting my foot down :)

  2. Very nice, I just wrote an article on the same topic (which totally makes sense on a PF blog :D). Either way, the idea is that you have to stop adding debt in order to get out of debt. It’s pretty easy, in my opinion and the only way to do it.

  3. It had to be for the emotional burden. debt at times does feel like a dark cloud hanging over one’s life and choking off the light of freedom. Glad am doing it, the sooner I can unshackle myself the better!

  4. I did it after taking my car loan. It was pretty painful to pay for it for 4 years, but I finally made it. Each and every month, when my bill would come, I’d swear that I’ll never do this again. So far I kept my promise :D

  5. I never had a ton of debt, but having to go into it is most certainly one of my biggest financial fears. I make sure to always save and pay myself first to avoid it. Hopefully I’ll never have to take the leap (because I hopefully won’t be in it!)

  6. I’ve been trying to get out of debt for 6 years, but got really serious 2 years ago when I graduated with my M.A. and close to 60k in debt. Adding up to a total of 81k for both my degrees (ugh). I’ve paid off more in the last two years than I did making more money the previous four. Such is life….sometimes when you put your mind to it, it really does leverage you further.

  7. Everyone should make to move to get out of debt. These are all great insights. The ultimate goal of course is to have financial freedom and retire comfortably.

  8. I think now about how I just paid the interest on purchases which made things way more expensive then they actually were and it makes me sick. I even remember thinking of buying sale items because it was a great deal, but by the time I actually paid for it for real, it probably cost more than it was full price. I think keeping that in mind is what keeps me out of debt.

  9. The fact you called it a ‘leap’ is very cleaver and correct. It is always that final push that you are not sure will be successful or not. If you make it – you feel great however if you do not then you fall a long way and get stuck in more debt.

  10. Deciding that you have had enough and accepting the challenge is indeed the first step. Success requires a few things. A firm commitment, action plan and acceptance that extraordinary personal effort is required. You’ll want to consider and address both the cause and effect of your debt simultaneously. Overspending, lack of budgeting and poor money management is a common cause of debt problems. Sometimes however people find them self thrown into debt by a financial crisis, such as unforeseen medical expenses for example. Either way, you want to examine your budget very closely. The goal is to spend less, earn more and free up monies from your expenses or overhead, all with a view to increased debt repayment. The debt effect refers to the cost and terms of the debt held. Debt consolidation is one strategy to reduce the cost of carrying debt and better manage the journey to debt freedom.

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