Discussing the three steps to getting ready to get out of debt
My wife Lisa joins the show to share an update on how selling our house is going
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Almost everyone I talk with about money has a goal to become debt free or is already there. It's very rare that I talk to someone who doesn't wish or express a desire to not owe anything to anyone. The problem is not a lack of desire to get out of debt, it's not knowing where to start. The only way to truly pay off your debt is to PAY IT OFF! That's pretty obvious but today we will talk about the three steps you need to do before you start to pay off your debt.
It's really hard to pay off your debt if you don't first know how much you owe. I recommend writing down all your debts on a piece of paper or on a spreadsheet and beside each debt, list how much you owe. I also recommend going to annualcreditreport.com to get your free credit report which will help you remember any old outstanding debt you may have. For additional help on prioritizing old debts and learning how to deal with old creditors, please check out lesson #2 and #3 of the podcast.
You can't get out of debt if you continue to borrow. Sometimes we try to talk ourselves into borrowing more money because we think that will help us get out of debt sooner. The thing is your debt is still going to be around until you pay it off. It's like we try to fill a hole by digging a new hole and taking that dirt and putting it into the old hole. At the end of the day all you did was make a new hole.
Once you have your debts listed and you have committed to no more borrowing, now is the time to develop a plan of attack. If you have multiple debts it can be difficult to determine which debt to focus on. I recommend you focus on one debt at a time and put all your effort and money towards knocking out that one debt. I have found this to be the best method. But once you have a plan you are ready to knock out your debt and to ultimately become debt free!
We also have my wife Lisa join the show to give an update on how selling our home is going. Although we have had a few showings, we have not received any offers yet. That can be a little disappointing but we aren't discouraged yet. We also share what we have learned by having showings and discuss which is harder: getting your house ready to put on the market or keeping your house show ready when on the market.
Also I'm doing an upcoming podcast on how to save money on vacations. If you have any tips on how to save money on travel, where to get good deals on the Internet, or some nice vacation spots that people don't know about, please contact me and I'll share your tips with the listening audience.
In addition, I finally have created a newsletter for JW's Financial Coaching. This newsletter will be published once a month and will have exclusive content, allow you to learn of new products and features from JW's Financial Coaching first, and let you know about other good personal finance information around the net. You can register for the newsletter here, and in addition to receiving the newsletter, those who sign up will receive a free download of the "JW's Manifesto on Money." This is a 20 minute audio recording sharing my views on money including the topics of spending, debt, saving, marriage and money, where money fits in your life, and how you can win with money. I'm excited to share the manifesto with my newsletter subscribers.
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