Outline: Getting out of debt

I am in debt. I have mounded up credit card, student loan, and now mortgage debt over the years. Unemployment and extensive travel have put me in this hole. Now I have to tunnel out with a spoon. This outline is for me as much as it is for everyone in debt. These are the basic steps to becoming debt free:

• Evaluation: Gather all statements and other pertinent documents referencing any balances that you owe. Order them from highest balance to lowest balance and include the interest rates with each
• Emergency Fund: Save at least 2 months worth of living expenses in an emergency savings accounts.
• Plan: Once you have your emergency fund form a debt destruction plan. I use the debt snowball where all minimum payments are made and any extra goes to the lowest balance debt. Carry on with this until all debts are gone never reducing the total amount you pay each month.
• Execute: Follow your plan religiously. Cut corners where possible to pay more towards your debt. Throw any extra income or windfalls to your debt. Any pay raises should also add to your debt repayment. Paying off your debt is priority 1!
• Completion: Now your debt is down to 0 (except for maybe a mortgage). The money used to pay your debts can be directed to saving. Build the emergency fund to at least 6 months (1 year if self employed). Max out a Roth IRA. Save, save, save!

This plan will work for anyone no matter how much debt you have. The evaluation seems daunting at first but as you pay your lowest balances first you will get seemingly "big wins" which will motivate you even more. The debt snowball, when used correctly, works quickly. Stick to the plan and get it done!