Most Americans are in debt

Eliminate Debt easily and Plan Your Future

Doffinc - Car loans, credit cards, and student loans are the three most common actors who survive in many family budgets. If you find yourself in this situation, you are not alone. Don't spend more money than you make.

Many people may not have a car if there is no process like a car loan. If followed correctly, you must be able to eliminate most of your debt excluding your mortgage in 30 months.

The first step is to build a budget. If you previously contributed $ 300 to an IRA with a debt of $ 30,000, after you have paid off your debt, you can increase the IRA's contribution and maximize it.

The second step is to grow and expand your income, if possible.

The third step is what many people call a debt snowball or sometimes a debt avalanche. When doing this step, you only pay a minimum of other higher debts and throw away all extra money outside of your monthly budget with the smallest debt. If you let them stay while only paying a minimum, it can make you interest hundreds of dollars. Remember; only attack high-interest items, usually credit cards and payday loans this way, then continue the method of debt snowball. Use your initial savings step 2 economically.

Step 4 is to complete the construction of your emergency savings fund. Save what you need and proceed to the next step because at this point, if you have an emergency, you will have this fund and you must have a pension through mutual funds.

Step 5 is to focus your money on your investment. If you start saving for retirement at age 20, the percentage of your budget dedicated to retirement can be lower and more money can be used for your child's college funding. If you have not saved for college or retirement, you may want to set your budget to 45% for a mortgage, 20% for retirement, 15% for college and 20% for the rest of your expenses. If you have saved tuition and no retirement, maybe you send 45% to a mortgage, 25% to retirement, 10% to college and 20% to daily expenses.

Step 6 is to continue to fund your retirement account and enjoy life.

Categories: Debt Manage, Money Management