Got debt? You’re not alone. The average American’s credit card balance is over $8,000. In 2001 we paid $50 billion in finance charges, and 1.3 million people declared bankruptcy. Fortunately, you can become debt free. If you’re ready to eliminate your debt once and for all.
Preparing to be debt free
There are no complicated calculators or special tricks to becoming debt free––as personal finance guru Dave Ramsey says, it’s 20% knowledge and 80% action. That action is what’s so hard. Getting out of debt is like making any big personal change–losing weight, starting to exercise, or quitting smoking–it is not easy, but the results will change your life.
The seven steps to become debt free

  1. Write Down Your Financial Goals — You have to know where you going before you can get there. Often times our debt is the result of short-term thinking. It’s time to think long-term in order to begin to change our short-term habits.
  2. Determine How Much Debt You Have — Are you afraid to look at your credit card balances? I’ve been there. But ignoring your debt will not make it go away. It’s time to swallow hard and take stock of just how bad your debt is.
  3. Develop Your Debt Management Plan — Your personal debt management plan is your road map to becoming debt free. It can be a long road, and you’ll need this plan to make sure you stay on course when things get treacherous.
  4. Negotiate, Eliminate, or Consolidate Debt – Once you have your road map, it’s time to look for shortcuts. Sometimes you find them, sometimes you don’t, but any you do find can get you to your goals faster and save you thousands of dollars.
  5. Automate Your Debt Payments — Pilots use autopilot for a reason—it frees them from routine steering to focus on navigation and safety. Ultimately, it’s safer for the plane to fly itself. The same is true for your debt. You’ll make progress faster—and feel better—if your debt payments take care of themselves.
  6. Monitor Your Debt Elimination Progress — Just because the plane’s on auto pilot doesn’t mean the pilot is ignoring the sky. He’ll want to avoid a collision or find more favorable winds if they come about. Learn to alter your debt management plan as you go along.
  7. Live Debt Free — Once you’re debt free, learn to manage your finances so you never have to face debt again.