We would personally like to thank Rob Semrad Chicago for dedicating some of his valuable time to speak to us and provide you guys with these excellent debt free tips.
If you follow these steps, you will become debt free. The average time is 18-24 months. Some people may get there in less time; others might take a little longer. But the destination of this process is the same for all; Financial Freedom.
Get out of debt by following these steps ten steps.
– Save a $1,000 to start a Short Term Emergency Fund
Doing this first phase will be hard for some. Saving any money in this economy is probably not that easy. If your income is very low, then save $500. The point is to have a backup in case your transmission goes out, or you break your arm, etc.
-Pay off all of your debt using the debt snowball system
Write down all of your debts excluding your mortgage. List them smallest to largest. Pay off the smallest debt first and then go to the next one. Only pay the minimum amount due on all debts except the smallest.
– Save 3 to 6 months of living expenses
By now you have wiped out all of your debt except your mortgage. But don’t stop the momentum.
-Invest 15% of household income into Roth IRAs and pre-tax retirement
Building wealth is now your priority. But only once your debt free and have a large emergency fund in place. Put 15% of your household income into a Roth IRA.
– Start a college fund
If you have kids or plan on to have children, then it’s never to late to start saving for their college. Students are graduating from college with massive amounts of student loans, and this is the start of their financial baggage. Preparing for college can be easy if you start in advance. Help your children get through college so they don’t have a student loan dragging them down when they get out.
-Pay off home early
Its time to get rid of your mortgage. By now you probably have a lot of extra money since you can breathe again financially. Put all of your extra income towards the mortgage.
-Build wealth and give!
Maybe you have always wanted to give to your church or sponsor a child overseas. Now you can give without the financial pain that comes with it.
-It is advisable also to see a lawyer who knows about filling for bankruptcy
The uncertainty of not knowing what could happen next can quickly mix a person up. Resolving this uncertainty is a significant another good step.
-Another option as an alternative to bankruptcy is to file an Individual Voluntary Agreement. This paper will let your creditors know you intend to pay back your debts over a five-year period. Tell all collectors what your plans are. If this is what you decide to do, you should talk to a professional first. If you take this step, stick to your plan.
-When you are paying your loan, the bank may give you the offer to change your unsecured loan into a secured loan. Be sure you do not fall into this trap. By going along with the bank’s plans, you will put everything you own at risk. This is an option the bank offers to make it look as if they are relieving some pressure on the client. But it can create the unnecessary risk of losing everything.