We had 3 young children at the time also.
Decide you are willing to do what it takes to live debt free.
Think of it as a game….and you are going to win it!
Steps: this is very different for each person.
I am a christian so I prayed first.
Secondly, since our income was so meager and we had bounced check fees all at once that could have paid for a whole month of food we decided it was cash living for us……closed my bank accounts.Paid by money order or cash………. We also began titheing 10 percent to our church. Those that are not christian could give to their favorite charities first.
Dire circumstances calls for extreme measures and that is where we were at.
Organize your debt into categories monthly, loans, credit card, medical – all debt into a category
Look at the crises debt first..rent,mortgage,heat,elect..gotta have those
Evaluate your income
mobilize income from work,money in the bank..wherever you have income
use it to pay that crises debt…..you have to have a place to live…
you will need some money for gas and food…..but pay off the over due rent or mortgage…
at this point people do many things
debt consolidation is one of them. I did not do this.I know others who have and in some ways it does make sense…
but for me I just wanted to pay off the debt one debt at a time…..that worked for me very well…
People who have done debt consolidation often go back into debt again….
Not always for those of you who have suceeded with debt consolidation and have stayed out of debt….
here is what we did:
created a budget and lived by it and still do live by it.
What do you put on your monthly budget?
First you have to know:
The difference between debt and the monthly forevers!
Monthly forever bills are bills you will pay monthly forever electricity,gas,insurance ect
Debts are all the extras that you owe…….
Create a budget putting both the monthly FOREVERS and the DEBTS you owe.
Organize your monthly forevers first. Then the debts
Reevaluate your debt and organize the debt you owe from the least owed to the debt you owe the most on….
Pay minimums on everything except the first debt. Plan on being a DEBTBREAKER for that first debt….pay the minimum plus every extra penny you can come up with.When that debt is paid off roll over that payment for the first debt plus the minimum payment for the second debt you were already paying: Keep doing this until all debt is paid. Remember to rejoice over each paid debt. I did!