Perhaps we can help our own economy by keeping our local banks in business. Watch this short video and see if I’m right.

When you get ready to cut up your credit card this is a good way to do it.

Getting out of debt involves three main steps:

1. Stop acquiring new debt
2. Establish an Emergency Fund
3. Implement a Debt Snowball

How do you follow these steps? Here are some tips on how to approach this.

Stop Acquiring New Debt

This first step is the quicket, yet sometimes the hardest. If you are way in over your head in debt and can’t see a way out, this step is absolutely necessary.

Do whatever you can to not get further into debt.

Cut up your credit cards, this is the first thing to do. If for some reason you must have a Visa or other major card, make sure it’s a debit card, not credit. As long as you have access to those credit cards the temptation to spend money you don’t have will continue.

Cut down on your expenses. Make a list of all of your expenses and figure out what you could go without. Most of us can find at least a few, if not many, things that we really don’t need to going into more debt for. If you’re living a life of luxury and it’s ruining you financial you’ve got to stop the instanity.

Create a planning budget with the help of the Personal Wealth Guru easy-to-use get out of debt software. Once you’ve created a list of all your expenses and your income, enter it into Personal Wealth Guru and it will help you manage your money. Enter your income first and then only your necessary expenses (i.e. mortgage/rent, car payments, insurance, phone, utilities, internet, gas, food). This will give you a good idea of where you could be financially if you didn’t have so many other payments going towards debt and interest. Now enter your monthly debt expenses from credit cards and other loans, don’t add your miscellaneous luxury expenses just yet. Now you’ll see where you are financially when it comes to essential expenses and debt payments. Hopefully you’re not at a negative monthly balance? The last thing to add is your misceallaneous expenses, things that you could really do without. If you end up with a negative monthly balance, start by figuring out which miscellaneous expenses you want to eliminate. Keep elminating these expenses until you end up having extra money available each month.

Establish an Emergency Fund

Once you’ve gotten your expenses under control you may find that you’ve got extra money each money that you can put towards building up an emergency fund. Start by building up a least a $1000 fund. This should be plenty for most emergencies.

Implement a Debt Snowball

Once you have your intial emergency fund established, implement a Debt Payoff Snowball. Personal Wealth Guru has a built in calculator to help you figure out how to manage your snowball. The basic idea is that you start by putting extra money towards paying off your smallest debt. Once you’ve finished paying your smallest debt, take the money you were paying on that debt and it apply it to the payment of your next largest debt. Continue doing this until you’ve paid off all of your debts. With each debt paid off, apply that money towards the next one.

You’re On Your Way to Freedom

Getting your finances in control truly is freedom. As you begin to implement these steps, starting with cutting up your credit cards, you truly will experience increased freedom in your life. It’s also likely that you will be less stressed and the closer you get to the light at the end of the debt tunnel the more financial and personal freedom you will experience.

The most important thing to do is start now, don’t put this off until tomorrow. Become debt free, and be free!