Step 3 - Analyze Your Debt
The next step is to figure out exactly how much you owe. First, make a list of every debt you have. Not just credit cards, everything. Credit cards, department store credit, mortgages, car payments, unpaid past-due bills, student loans -- everything.
You do not need to count items such as recurring bills like electric, gas, cable, etc. These are not debt, they are recurring expenses. At any time you could shut these off and not owe any additional money, although it may make life unpleasant, to say the least.
9 Steps to Get Out of Debt Part 4
By Jeremy Zongker Step 4 Reducing Your Interest If you have read the previous articles, so far you have learned how wide spread of a problem debt is, the true impact it can have on your life, and..
By Jeremy Zongker Step 4 Reducing Your Interest If you have read the previous articles, so far you have learned how wide spread of a problem debt is, the true impact it can have on your life, and..
Once you have a list of what you owe, you need to determine what your remaining balance is on each item, the current interest rate and your monthly payment for each debt. On most loans you'll be able to find this information on your monthly bills. However, you may have to make some phone calls to get this information for other debt. Add the remaining amount on each of these items together, this is your total amount of debt. Also, add together your monthly payments for each of these debts to determine the total monthly cost of your debt.
Now, you need to determine how much this debt is going to cost you if you continue making the payments you currently are. You can do this by completing an amortization table for each debt. Don't worry, we're not going to make you do this yourself, you can use our amortization calculator located at [ http://www.destroydebt.com/calculators/] . This will tell you two key pieces of data: how much each debt is going to cost you, and when it will be paid off. Add the total cost of each loan together; this is the total cost of your debt. This number can be scary at first, but don't get too worried yet, this should be the last time you see this number.
If your total monthly debt is greater than 50% of your net monthly income, or you have found yourself in a situation where you are unable to pay your bills and have fallen behind by several months, I would suggest you stop here and seek the advice of a professional financial counselor. Otherwise, continue on.
9 Steps To Get Out Of Debt Part 5
By Jeremy Zongker Step 5 Freeing Up Income You were warned in the first article of this series that paying off your debt was going to require some work and sacrifice. Thats what this article is a..
By Jeremy Zongker Step 5 Freeing Up Income You were warned in the first article of this series that paying off your debt was going to require some work and sacrifice. Thats what this article is a..
About the Author:
This article has been provided courtesy of Destroy Debt, [ http://www.destroydebt.com] .
