How To Depelop A Plan To Eliminate Credit Card Debt

The average American household has several thousands of dollars in credit card debt. If you feel that the weight of credit card debt is crushing you, there is good news. No matter how deep of a hole you are in, it’s possible to get out. It won’t necessarily be easy, but it is possible. With hard work, discipline, and dedication, you can regain control of your finances and eliminate credit card debt.

No Shortcuts

Barring a financial miracle, the path out of credit card debt is rarely quick and easy. Instead, it requires a detailed plan of attack. Over the past thirty years, it has been repeatedly proven that writing down goals is a significant precursor to success. Furthermore, in the world of business, it has been proven that writing out a business plan significantly increases the probability of sustained success. Personal finance should be viewed the same way. You are your own business. Writing out a detailed plan for how you intend to eliminate your credit card debt is an essential step toward actually making it happen.

In the business world, it is easy to get an idea for a new product or service. It is another matter altogether to transform that idea into a profitable business. Your personal finances are no different. You have the idea that you want to eliminate credit card debt, but the real test is transforming that idea from an idea into reality. And that is where the plan comes in.

Start With Analysis

Similar to a business, you need to analyze your current situation. Take an honest, objective look at your current financial situation, and conduct a 30 day trial. During this period, write down every purchase that you make and keep every single receipt. At the end of the 30 day period, schedule a time to sit down and assess your spending habits.

Take a blank piece of paper or use an Excel worksheet, and make two columns: “Essential” and “Non-Essential.” Now, place each expense under the correct column. “Essential” expenses should include only expenses such as rent, mortgage, utilities, insurance, etc. No matter how much you love bad music, tickets to the latest Lady Gaga concert are not essential.

Once you place each expense in the correct column, take a close look at all of your “Non-Essential” expenses. Determine every expense that you can eliminate from your life. Once you commit to cutting back expenses, you can now direct this extra cash flow toward paying down larger payments toward your credit card debt.

Work More

I heard a statistic years ago that said the average millionaire works more hours per week than the average non-millionaire. I heard that at some point when I was still in college, and it surprised me. At that point in my life, I had that false impression that millionaires were people that had struck it rich and were living the good life, sipping margaritas by the pool all day. But the reality is that most wealthy people are wealthy because they work!

Consider picking up an extra half shift or shift per week to increase your monthly earnings. If you are a salary worker and cannot make any more money, then consider taking up a second part-time job. If you have a professional skill set, you can probably begin networking and setting up a small consulting or contract job on the side. Risky investments such as forex trading should be reserved for later.

The Deadly Combo

This combination of cutting back expenses and increasing income is the best and most efficient way to get out of credit card debt. As we stated at the beginning of the article, this is not necessarily an extremely enjoyable process, but the hard work and dedication will pay off.