Getting Out of Debt: Easy Concept, Hard Execution

THE DEBT DANCE METHOD OF GETTING OUT OF DEBT IS EASY–IN THEORY:

DECIDE WHAT YOUR OVERRIDING DREAM OR GOAL IS.

EXAMINE HOW YOU CAN TRIM YOUR SPENDING.

USE THE 3 TIERED METHOD TO ALLOCATE YOUR MONEY:

First PAY THE GOTTA’S: MORTGAGE, INSURANCE, UTILITIES, MINIMUM DEBT PAYMENTS, CAR PAYMENTS, MEDICAL, CHARITY.
Second PAY YOUR DREAM: MAKE AN EXTRA PAYMENT ON A CREDIT CARD, START SAVING FOR A DOWN PAYMENT ON LAND YOU WANT TO BUY….
Third LIVE ON WHAT’S LEFT: GROCERIES, DINING OUT, CLOTHES, ENTERTAINMENT, ETC.

Sounds wonderful but it may not work for you. There simply may not be enough money to do this, especially if you’ve been living on credit cards. The First thing you must do is stop debting. You will never get out of debt and reach your dreams if you continue to debt. Never. Ever.
The following are some ideas to help you creatively solve your issues (and they are solvable!)

◙Create an income property either in your current home or in a new home. Buy a multifamily building, live in it, with one or two renters. The rent of ONE renter (because you are bound to have vacancies) should cover 80-90% of your mortgage payment. (How great would it be to live without a mortgage payment? Think how fast you could achieve your dream.)

◙Similarly, get a roommate.

◙Dedicate yourself to making more money and funnel that money directly into debt and dream payment:

get a second job
get a new job that pays better
obtain an increase in pay with your current company
start a weekend business doing something you really enjoy (my favorite)
sell your house, use your equity for the second tier (debts and dreams) and live in a rental property for a short term.

◙ If you really see no way out consult a bankruptcy attorney. I do not recommend debt consolidation or settlements. These companies are dropping like flies, charge outrageous rates, and rarely deliver. I speak from personal experience. I also recommend you visit GetOutofDebt.org to read some of the true stories about these companies. Bankruptcy is a personal choice. It is something my husband and I chose. Initially we felt very shameful about it until we started adding up how much we had paid the credit card companies at 28% interest. Bankruptcy is known as a “second chance” and that is exactly what it is. (Please note you cannot erase your student loans through bankruptcy.) If your financial situation is destroying your marriage, family, health, etc. than bankruptcy may be exactly what you need.

◙ Do not borrow more money to pay debt, either loans from other people (it will destroy relationships), or through second mortgages or cash advances. And definitely stay away from payday loans–the loan sharks of the business–see article below. Payday loan interest rates can run in the hundreds or MORE! (Isn’t that illegal???) The only exception to this is borrowing from your life insurance–this may be a great low interest loan that you may not have to pay back. Check it out.
You CAN get out of debt and achieve your dreams by keeping your dream fresh and foremost in your mind, and using your imagination, your creativity, to find solutions. Remember that the definition of insanity is to keep doing the same things and expect a different result! 75px-Einstein1921_by_F_Schmutzer_4