How to get out of debt?
I am about 5K in credit card debt, with a car note and about 80K in school loan debt. How do you save and still pay this off before I am 80 years old. I make about 2300 a month. I live far from my family so I can’t move back home. What to do?
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Comment from Chris C
Time May 19, 2010 at 12:11 am
1 free up some cashflow or create some cashflow that can be used to put additional payments on your debts. Whether it’s cutting out social life spending, or getting a parttime job, every extra dollar will help.
#2 Make extra payments on the smallest debt until it’s paid off.
#3 When the first debt is paid off, take the entire payment including the extra cashflow you had and apply it to the next biggest debt until it’s paid off
#4 When the second debt is paid off, take that entire payment including the initial cashflow, the initial debt payment and the second debt payment and apply it to the third debt until it’s paid off.
Repeat this by carrying the total payments forward to the next debt until it’s gone. It’s important to keep your monthly payments as high as possible to get rid of the debts.