How I Paid Off $35,000 in Debt

No no like Hilda said, it's not my debt.

Last year, December I read four financial related books. In fact those books were the only books I read apart from pregnancy books. I have learned a lot and determine to make my financial statement clean or positive by end of this year. I am always been fascinated on how to eliminate debt and glad I found a few ways. I thought I will be fine with my financial standing by this year but the arrival of a new baby distrupted everything.( I am not complaining as the joy brought by Sona is beyond words can describe) I spend more ( and who doesn’t). I start to spend on cloth diapers, baby things and that includes baby chair, baby rocker, baby dresses, attires etc etc and now I am into this Bento craze just like other mommy bloggers. The spending can never stop, that I am sure now. Then how will I be able to eliminate my debts? I know I need to have an extra income and I do now, in fact I have some extra incomes, not much but at least I have right? So, I use all the money from my extra income to pay for all those expenses incurred above and used my monthly pay to pay for my credit card and the rest of my expenses i.e reload cards, petrol, food, toiletries. I have planned it quite well and I hope by the end of the year, I will have just one more debt to settle-my housing loan.

I saw this at Hilda’s blog and I think this is worth sharing.

How I Paid Off $35,000 in Debt, and How You Can Too

Debt elimination involves three main steps:

Stop acquiring new debt.

This may seem obvious, but if your debt is out of control, it’s because you keep adding to it. The first step on the path to debt freedom is to stop using credit. Don’t finance anything. Cut up your credit cards.

Establish an emergency fund.

Keep this money liquid, but not immediately accessible. Don’t tie your emergency fund to a debit card.

Attack existing debt.

List your debts from lowest balance to highest.
Designate a certain amount of money to pay toward debts each month.
Pay the minimum payment on all debts except for the one with the lowest balance.
Throw every other penny you possibly can at the debt with the lowest balance.
When that debt is gone, do not alter the monthly amount used to pay debts, but throw all you can at the debt with the next-lowest balance.

While you learn to spend less, do what you can to increase your income. If possible, sell some of the stuff you bought when you got into debt. This can be painful, but ask yourself: Do you really use that weight bench? Is your DVD collection really doing you any good? Use eBay or Craigslist or the Amazon marketplace to get some cash from the things you own. Consider taking an extra job or working longer hours.

Go and let makes money together and eliminate any debts that we have.