A Plan to Accomplish Doing This As Quickly As Possible

In our troubling economic times, many people find themselves with mountains of debt from mortgage payments, car payments, credit card payments, and more.  What is even more troubling is that it is very hard to get out of this debt once you are under it.  However, it is possible to get out of debt, and more importantly, it’s imperative that you get out of debt as quickly as you can, as this will enable you to save more for retirement and to have less stress in your life, which should enable you to enjoy life more, even in these difficult economic times.

Therefore, how does one get out of debt?  First, you have to analyze what is causing your debt.  In other words, you need to see what you are spending your money on each month.

There are certainly the essential items (a.k.a. “essentials”) you need to spend on, including the following:

• Food
• Utilities
• Mortgage/Apartment Payments
• Car Payments
• Essential School supplies (if you have children – pens, pencils, paper, backpacks, calculators, computers, printers, Internet, etc.)
• Essential Pet Supplies (food, vaccinations, medicines, litter and litter boxes if appropriate, etc.)
• Taxes (this ISN’T optional – you will be charged interest on taxes you can’t pay and need a payment plan on, so taxes come under the essential items)
• Similar items that you cannot afford to be without (i.e. you need them to survive and live, NOT because you want to have them or because your life would be boring if you don’t have them)

Non-discretionary income, or income spent on items that you absolutely must have to survive and live, is what needs to be applied to the items listed above.

Then there are the “luxury” items (a.k.a. “luxuries,”), or items you can afford to live without (even if they make your life “boring” or less “exciting”), such as the following:

• Vacations
• New cars (provided your current automobile is in drivable condition and can get you where you want to go without any problems; if so, you DON’T need a new car)
• Purses, shoes, new wardrobes, etc.
• Sporting events
• Concerts
• Theatrical performances
• Eating out at restaurants
• Cable/Satellite television (again, this is NOT essential; life may be more “boring,” but life WILL still go on with just local television)
• Power tools (most power tools can make tasks easier, but are NOT essential for completing household or outdoor chores – it will just take more “muscle grease” to complete the job)
• Similar “luxury” items that make life more enjoyable or easier, but that are NOT essential in order to survive

Discretionary income, or income that is spent on non-essential goods and services (think of it as “extra income” that is left over after paying the first group of items listed above each month), is what should be used on items above. The important point is that, if you have mounting debt, the only way to get out of that debt is to start applying your discretionary income toward those credit card bills.

In other words, you currently DON’T have the discretionary income to pay for more luxury items (i.e. the second group of items listed above). Whatever money you have left over from your budget MUST go toward paying off your credit card debts and NOT toward buying more luxury items if you are to ever get out of debt.

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