Ready to finally get your money in order? Learn step-by-step how to gain control of your money and begin to build some wealth in this 6 part series! Part 3 is all about eliminating your debt.
Hope you are enjoying the series and gaining a ton of valuable information. Keep tackling those action steps and you’ll get there one step at a time. If you’re just jumping into this series, make sure you start at part 1. You can link there at the top or bottom of this article.
Ok, let’s get started and focus on the next step: getting rid of your debt. If you have debt it’s time to eliminate it. If you don’t, congrats! Move onto the next part in the series.
I highly recommend carrying no debt other than a mortgage. Now, I realize sometimes it’s necessary, especially as a millennial. When you are just getting started in life and your income isn’t that great it may be necessary for essentials like a car.
Maybe you had to take out student loans. I know I did.
Once you have your car, finished college, and have your own home or apartment, it’s time to start getting rid of that debt.
I’m not going to bullshit you. Depending on how much debt you’ve taken on, it may take time to get rid of it and it’s not easy.
BUT, there is a way to automate the process so you don’t have to worry about it. Create the plan, start the automation, and that debt will begin to eliminate its self.
Here’s what you need to do:
Step 3 - Automate and Begin Eliminating Your Debt
The very first thing you need to do is eliminate all your debt access.
Cut up credit cards.
Close lines of credits.
Do whatever takes to stop increasing your debt.
Once you have stopped increasing your debt, you’ll automate your debt payments just as you did with your monthly bills in part 2.
List out all of your debt by:
Sort them from lowest balance to highest.
Choose the lowest balance debt and apply most of your debt repayment money towards that debt while paying the minimum payment on the rest. Do this until that debt has been paid off, then choose the next lowest balance debt and continue this cycle until all the debt is gone.
(Ignore applying this method to your mortgage debt for now.)
Assign each debt to a paycheck to be paid from. You want to apply as much as you can, but don’t squeeze yourself so much that you are constantly struggling. That would defeat the purpose and propel you further into debt.
Create an automatic payment in your bank or credit union’s online bill payment system for each debt payment the day after your check deposits.
Depending on how much debt you have, this can be a long game, but it will be well worth it in the end. On top of that your pay down is automated so you don’t have to worry and stress about it.
Get rid of all your access to debt
Create a list of all your debts by highest balance
Determine how much money you can put towards each debt
Assign each debt to a paycheck
Setup automatic payments to those lenders
Keep an eye out for step 4 coming next week, where I’ll talk about creating a budget that works for you.