Debt will keep you from reaching your financial goals, like saving for retirement or buying a home. It can be a source of stress and grief, causing you to constantly worry about your finances and regret the limits debt has placed on your life.
Fortunately, debt isn’t a life sentence. You can (and should) make getting out of debt a priority. Follow these seven steps to take control of your finances and pay off your debt for good.
1. Understand the Type of Debt You Have
Getting out of debt—and staying out—requires that you change the habits or circumstances that led you to debt in the first place.
Understanding the type of debt you have, and how it happened, can help you create a plan for paying it off and make it less likely that you will fall back into debt in the future.
If you have debt that you don’t know how to manage, consider talking to a credit counselor. Credit counseling agencies are usually nonprofit organizations such as the Financial Counseling Association of America or the National Foundation for Credit Counseling. They are staffed with trained agents who can help you with:
Understanding your debt
Tracking your spending
Creating a budget
Developing a debt repayment plan
Download The Step by Step Guide to Get Out of Debt Easily Free