The Step-by-Step Guide to Demolishing Debt

Debt comes from two situations: spending too much or making too little.

We each choose our own destinies but there are many situations which are just too far out of our control. We can certainly take the blame when we overspend on a new TV, which we’ll regret later but for now there is glorious high-def movies, but the latter of the two is a situation we’ve all been in and frankly: it sucks.

The Problem Reveals the Solution

Coincidentally, the same reasons we often go into debt also provide answers to how we can get out.

For example:

• If we’re spending too much money than we simply need to create a manageable budget
• If we’re making too little money than we need to increase our pay

A combination of two of these is the obvious solution (and also happens to lead you to wealth) but let’s break them down further and discover the path for each:

Budgeting

Starting a budget will benefit a person in either situation. Sticking to a budget is the hard part especially with so many external factors whether it’s your wants or needs. A budget will give you the proper insight on where your money comes in and how it goes out; seeing these two elements of your finances will give you most of what you need to get on track.

Expanding

Increasing pay can be quite tricky due to current education, health issues, living conditions, and so on, but hard work pays off, in the long run. The quick solution is to find another job (or take on an additional part-timer) whereas the long-term solution would be through gaining a higher level of college degree, starting a successful business, or simply asking for a raise. If the financial stress is too much to bear than one of these options will suddenly become the obvious answer if you’re a hard worker.

A path to understanding each of these solutions (while demolishing debt and other money-related problems) is through the use of a cool new tool called MyMoneyCheckup.

This tool is really easy to use and doesn’t pack on the gimmicks like so many other financial reporting services and sites that have catchy credit-related songs.

It walks you through a questionnaire about your living conditions, income, budgeting, and long-term goals (like retirement) and then gives you a report about how you’re doing and some tips to make it all better. Additionally, it’ll give you a budgeting calculator to get down to the finer details about where your money is going.

To get started with the tool (which is also available in Spanish, if you speak the language):

1. Sign up for an account (it’s free)
2. Walk through the process of entering in basic information about your budgets, borrowing habits, savings, housing, retirement, and other goals.
3. Finish a few of the last questions (which will make you realize you’re probably not good at calculating percentages)
4. Get the results and try out the budget tool
5. Check out some of the bonus resources if you need extra information

For your records, you could download the report as a PDF and print it out. You should maybe tack it to the wall so it’s a constant reminder about knocking down that debt.

In all, it’s a quick-and-easy tool for understanding your finances. Compared to others, it’s a breath of fresh air in an industry saturated by shady debt services. It puts you in control of what needs to be done.

Anna Hicks is an online writer who focuses her writing on personal finance, business, and sometimes career. Anna’s normal writing topics include finance applications in business or even things as simple as family finance. You can read more writing by Anna at her personal finance website, paidtwice.com

Image Credit: Shutterstock.com

Tags: Anna Hicks, budgeting, debt

Category: Money Basics