A Step-by-Step Guide to Getting Out of Debt

Life can often be extremely demanding and in many ways, there are plenty of unforeseen events that can often make you feel weighed down and even, at times, hopeless. An unexpected medical emergency, an issue with a vehicle you were depending on to get into your job, the list really could go on. But the upside is there is more potential and people out there willing to help you solve your problems more than ever.

Unfortunately, there are a lot of people that have difficulties fully comprehending the financial nuances that can make these tough times into something more manageable. For example, someone may have to pay several thousand dollars out of pocket for a medical expense before insurance covers them. For most Americans this is an expense they aren’t ready to bare without insurance.

In the case that the doctor, hospital, etc can’t give you a specialized line of credit with low interest rates to make your new debt manageable, what most Americans will do is go for the low hanging fruit. The low hanging fruit unfortunately is high interest rate credit cards.

It’s very easy for Americans to get high lines of credit, but with 26% APR rates a $6,000 purchase on this card could turn into a $24,000 if you aren’t paying back more than just the minimum every month.

If this Sounds Familiar There is Good News

What most Americans don’t realize is that private lenders and banks are easily willing and able to extend you much better loan rate! You can go from paying an egregious 26% APR on a $2,000 loan to going to paying 3-5% on a $2,000 loan!

Even more exciting is when you leverage the banks money, you can also put banks into competition with each other! And the true beauty of doing this is, you can assure yourself some of the best loan rates possible. So you can have banks fighting each other to save an extra 1% on your loan!

Spending Habits Need to Change

Besides consolidating your debt with a loan, there also has to be a change in your spending habits. There are various ways your relationship with money must change. Some of those ways is to cut back on liabilities or habits that you know deep down are causing issues for you.

You can pretty much put your spending habits into three buckets, your musts, your investments, your wants.

Musts are things like food, water, shelter, health, transportation. These are essentially non-negotiable and really there is no reality where you can’t have these things. The next bucket is your investments, this is where you put money into systems or ideas that make you money. You really can’t “lose money” when it becomes an investment, it just requires discipline, so whether that discipline is money put back into your own business or its education that you plan on taking action on this is okay.

The one bucket you should be evaluating is your wants. Most people invest into their wants without having the financial backing to support this lifestyle. They want a nice vacation, they want an expensive apartment, they want a nice car, and they want more alcohol. By taking altitude on your lifestyle you will find that you might be able to be more creative with your ability to save money and move yourself out of a bothersome debt quicker than you expected!

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