Many people who have debt blindly make their minimum payments each month without a single thought about paying off the debts. Being committed to putting a plan in place to reduce your debt is the first big step to a future of financial freedom.
- Make a Plan to Get Out of Debt
- Calculate Your Total Debt
- Prioritise Your Creditors
- Determine How Much You Can Pay
- Make the Plan
- Put Your Plan Into Action
The plan is just one part of getting out of debt. The next part - the part that takes the most time - is actually making the plan happen. If you've plugged your debt into a debt repayment calculator then you know it can take several months, even years to completely pay off all your debt – go to www.moneysmart.gov.au
Revisit and update your plan continually as you make payments on your debt. Make changes when your financial situation changes - for example when your income decreases or increases or you take on or get rid of expenses.
Put extra money towards your debt as often as you can; the more you can pay, the sooner you'll be out of debt.
Don't be discouraged by setbacks - you may experience them from time to time. The key is to pick back up immediately and not get derailed by complications.