Easy Steps To Get Out Of Debt, According To A Certified Financial Planner

Share this & earn $10
Business Insider
Published at : 06 Oct 2021
102738 views
2016
88

Getting out of debt can feel overwhelming. The first step is to organize yourself so that you can plan out exactly how to get yourself to financial stability. Lauren Lyons Cole, a certified financial planner and senior editor at Business Insider, explains the first steps you should take to attack your debt.

Business Insider tells you all you need to know about business, finance, tech, science, retail, and more.
Subscribe to our channel and visit us at: http://www.businessinsider.com/
BI on Facebook: https://www.facebook.com/businessinsider/
BI on Instagram: https://www.instagram.com/businessinsider/
BI on Twitter: https://twitter.com/businessinsider

————————————————–

Following is a transcript of the video:

Lauren Lyons Cole: My name is Lauren Lyons Cole. I’m a certified financial planner and a senior editor here at Business Insider.

I’ve helped a lot of clients get out of debt, and it’s actually a lot of easier than it seems when you’re staring at a pile of credit-card debt or student loans that you just don’t know how to get ahead of.

The first step to take is to get organized. That’s the part that a lot of people are afraid to tackle. So take a Saturday morning, make yourself a really nice brunch, and make a list of all of the different debts that you need to pay off. What I mean by that is, make a list of exactly how much you owe to each different place. So if you have a Visa that you owe $2,000 to, put that first on the list. You also need to know your interest rate, the minimum payment, and the due date for that debt. Keep doing that for all the different things you’re trying to pay off. That way you can prioritize which debts you want to tackle first.

Once you can see a full picture of everything you owe, you can create a plan. But before you create a plan, it’s important to take a step back. There are a few things that you have to be aware of. No. 1, be realistic when you are creating the plan. You don’t want to set yourself up to fail. Paying off debt can take a long time. Two years, three years, even longer. So this isn’t something you’re going to fix overnight. And that’s OK.

The other important thing to be aware of, though, is that this is temporary. We are not talking about forever. So any sort of lifestyle adjustments that you make now to pay off your debt will eventually end. And you absolutely can pay it off. I’ve seen so many people do it.

To tackle your debt, at the bare minimum you have to make all of your minimum payments on time. That’s very important for your credit score. So you can set up automatic payments to make sure those payments will go out on time and in full.  Obviously, you’ll have to pay more than the minimum payment to put a dent in your debt. But exactly how much will vary from person to person, and it could even vary from month to month. A good rule of thumb is to aim to pay double your minimum payment to any of your debts. That might be hard in some cases. So even paying $20 or $50 more can speed up the process of getting out of debt.

I’ve had luck with clients who have paid the debt that had the highest interest rate first. Some people would recommend paying the smallest debt first. So if that works better for you, great. The point is to gain momentum so that you begin to see your debt balance decrease. It might take a little trial and error to see which one works best for you.

The hardest part about paying down debt is that it really does require a lifestyle change. Again, it’s just temporary, but you’ll have to cut back on certain areas of your spending if you are going to free up money in your budget to put toward paying down your debt.

Once you have a plan in place, it’s important to stick to it. But if extra cash pops into your bank account from a tax refund or a really generous gift, there’s nothing wrong with putting that toward the debt as well to fast-forward the process.

Paying down debt is a temporary goal and one that is very achievable. All it takes is getting your plan in place, sticking to it, and watching it happen.

————————————————–

Follow BI Video on Twitter: http://bit.ly/1oS68Zs
Follow BI on Facebook: http://bit.ly/1W9Lk0n
Read more: http://www.businessinsider.com/

————————————————–

Business Insider is the fastest growing business news site in the US. Our mission: to tell you all you need to know about the big world around you. The BI Video team focuses on technology, strategy and science with an emphasis on unique storytelling and data that appeals to the next generation of leaders – the digital generation.

Business InsiderDebtFinance

The Smiths - There Is A Light That Never Goes Out

The Smiths - There Is A Light That Never Goes Out

UK Customs Agents Bust Criminals | Border Patrol

UK Customs Agents Bust Criminals | Border Patrol

RESET Your MINDSET - Best Morning Motivation

RESET Your MINDSET - Best Morning Motivation

The NBA is Getting Weirder by the Day

The NBA is Getting Weirder by the Day

How to Pronounce General and Generally (the way Americans do)

How to Pronounce General and Generally (the way Americans do)

The Pizza-Making Contraption | Joseph's Machines

The Pizza-Making Contraption | Joseph's Machines

THE GOOD NEWS | September 13, 2021 @ 11:30PM PHT

THE GOOD NEWS | September 13, 2021 @ 11:30PM PHT

All electronic components  names and symbols.

All electronic components names and symbols.

[WEBINAR] Breaking the Mould: New Ways For Firms To Get Into Financial Planning

[WEBINAR] Breaking the Mould: New Ways For Firms To Get Into Financial Planning

The Dapperest of Days! | Magic Kingdom |  Spring Dapper Day 2021

The Dapperest of Days! | Magic Kingdom | Spring Dapper Day 2021

YOU KNOW I'LL GO GET (Tiktok Remix | Dance Fitness | TML Crew Kramer Pastrana

YOU KNOW I'LL GO GET (Tiktok Remix | Dance Fitness | TML Crew Kramer Pastrana

MY MOM IS HIDING SWEETS! 🍫🥬 || Cute And Useful Parenting Tricks And Funny DIY Crafts For Kids

MY MOM IS HIDING SWEETS! 🍫🥬 || Cute And Useful Parenting Tricks And Funny DIY Crafts For Kids

Brief

Brief

How Not to be Boring

How Not to be Boring

English song perhaps مترجم عربي برهابس

English song perhaps مترجم عربي برهابس

Apocalyptica - 'Path' (Official Video)

Apocalyptica - 'Path' (Official Video)

loiter around

loiter around

SOLO VS DÚO  JUGANDO  AGRESIVO "19 KILLS" //FREE FIRE

SOLO VS DÚO JUGANDO AGRESIVO "19 KILLS" //FREE FIRE

GIANT SPEARTON LEAF DESTROY ARMY OF FINAL BOSS | STICK WAR LEGACY

GIANT SPEARTON LEAF DESTROY ARMY OF FINAL BOSS | STICK WAR LEGACY

DJ Sammy - Look For Love (Official Video HD)

DJ Sammy - Look For Love (Official Video HD)

Comedy

Comedy

Pleasure - trailer

Pleasure - trailer

Lin-Manuel Miranda - Almost Like Praying (feat. Artists for Puerto Rico) [Official Video]

Lin-Manuel Miranda - Almost Like Praying (feat. Artists for Puerto Rico) [Official Video]

Not many people know this about tomatoes

Not many people know this about tomatoes

MercyMe - Even If (Official Lyric Video)

MercyMe - Even If (Official Lyric Video)

Wendy and Andrew Learn to Share Food and Pretend Cook Toy Food

Wendy and Andrew Learn to Share Food and Pretend Cook Toy Food

California Trains! 1 Hour, 150+ Trains!

California Trains! 1 Hour, 150+ Trains!

FUNCTIONAL TRAINING 2 | Fondos | Escaladores | Cardio | Saltos

FUNCTIONAL TRAINING 2 | Fondos | Escaladores | Cardio | Saltos

Ms. Green and Co.

Ms. Green and Co.

Aretha Franklin - Think (The Blues Brothers Version)

Aretha Franklin - Think (The Blues Brothers Version)

Meanwhile... Has Elon Musk Lost The Faith Of Tesla Owners?

Meanwhile... Has Elon Musk Lost The Faith Of Tesla Owners?

What is RIL (Reduced impact logging)?

What is RIL (Reduced impact logging)?

Learn to Read | One Syllable Words | Red Level

Learn to Read | One Syllable Words | Red Level

Surrender - Natalie Taylor

Surrender - Natalie Taylor

Calum Scott, Leona Lewis - You Are The Reason (Duet Version)

Calum Scott, Leona Lewis - You Are The Reason (Duet Version)

The Beauty Of Batman: Arkham

The Beauty Of Batman: Arkham

Beijing - A German Chef in China (for a short while)

Beijing - A German Chef in China (for a short while)

KingMostWanted - Different Varieties (Lyrics) | Panoramic B, ooh, Panoramic

KingMostWanted - Different Varieties (Lyrics) | Panoramic B, ooh, Panoramic

Lecrae - Whatchu Mean (Audio) ft. Aha Gazelle

Lecrae - Whatchu Mean (Audio) ft. Aha Gazelle

Nick Talos - Looking To Love (Lyrics) ft. Chelcee Grimes

Nick Talos - Looking To Love (Lyrics) ft. Chelcee Grimes

Yadah Ministering Your Presence is Heaven and Free Of Charge

Yadah Ministering Your Presence is Heaven and Free Of Charge

Marcus Aurelius - How To Be Mindful (Stoicism)

Marcus Aurelius - How To Be Mindful (Stoicism)

We asked complete strangers to design our dream kitchen.

We asked complete strangers to design our dream kitchen.

The Decisions - Somebody

The Decisions - Somebody

Facebook management is doing a 'terrific job': Altimeter's Brad Gerstner

Facebook management is doing a 'terrific job': Altimeter's Brad Gerstner

Kamaldeen Sulemana - This Type of Flair Cannot be Taught.

Kamaldeen Sulemana - This Type of Flair Cannot be Taught.

Concepts App Tutorial for Beginners - Structural Engineer's Perspective

Concepts App Tutorial for Beginners - Structural Engineer's Perspective

The Most Unique Product From Old Wood // Unique Recycled Wooden Furniture

The Most Unique Product From Old Wood // Unique Recycled Wooden Furniture

Dumb things we often do/dumb moments/funny moments

Dumb things we often do/dumb moments/funny moments