4 steps to get out of debt

If you are tired of being out of cash and carrying a large debt, then it's time you learn how to handle this! Take a look at this guide, follow these steps and start getting out of debt today.

Almost 80% of adults in the United States are in debt. If you are part of this rate, then it's time you start analyzing what you should do. Check these tips and learn how to get out of debt!

Check out this 4 steps to get out of debt

1. Avoid buying on credit

If you are a swipe addict but you don't have cash in your wallet, then the first step you should take to get out of debt is to avoid using credit cards. It's crystal clear: If you use credit, your debt will keep on growing. Credit cards are usually handy when you don't have that much cash or don't want to carry your cash around. But, what if you create a spending system by only using a debit card? Or a secured credit card?

2. The 50-30-20 rule is your goal

This is a simple but effective rule: You use 50% of your income for your fixed expenses (rent, loans, etc), 30% for variable expenses (like groceries) and 20% for savings. It may be a hard rule to apply overnight, but if you start organizing your income this way you will end up being able to cancel your debts and even managing to save money at the same time.

The 50-30-20 rule is your goal 

3. Create your budget

You are probably tired of reading about the importance of creating your own budget (and sticking to it), but if you really want to get out of debt, this step is essential. In order to create an effective budget, you need to understand why you've ended up with such a debt. Once you track your expenses for the last six months and write down your monthly income, you are ready to prepare your budget.

Remember, you need to stop spending on those non-essential items, like subscriptions, dining out or unnecessary clothes purchases.

4. Make a pay-off-debt plan

Once you've managed to organize your personal finances, it's time to decide which debt should be canceled first. Specialists assure that debts should be canceled according to their amount and interests.  So, make a list and enjoy the moment you start crossing out each debt as you pay it off!

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