Plastic Surgery for Paying off Debt: 9 Steps to Being Debt Free!

How to Destroy Debt forever - You can be debt free

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Do you want to get out of Debt? Have you been trying to pay off what you owe, but keep getting hit with unexpected emergencies.

Keep reading – we have 9 things you can do to kill your debt. And several things you can start applying today.

How is Debt Like Being in a Car Crash?

Have you ever come across an auto accident where a battered, bloody victim was walking around in a daze? Asked if he’s all right, he stutters, “Y-Yes, I’ll be fine.” Obviously hurt, in shock, and needing immediate attention, he still refuses help. “I’m all right,” he insists.

What does a car crash have to do with debt?

As we’ve helped numerous individuals and couples recover from their debt collisions, we’ve discovered this very analogy was an accurate depiction of their debt-induced condition.

These financially strapped folks are walking around in a daze, thinking that this is normal life:

  • Creditors calling
  • Demand Letters
  • Late notices in the mail
  • Utilities being shut off
  • Forclosure Notices

“Doesn’t everyone live this way?” they think. We have to retrain their thinking and help them realize this isn’t normal life.

Juggling finances, avoiding creditors, and “robbing Peter to pay Paul” are unhealthy for relationships and financial well-being.

How To Start A Debt Recovery Plan

We suggest a series of steps, none of them particularly easy, but all of them measurable and effective.

1. Acknowledge the Problem

The first step in any recovery program is admitting there is a problem and that you are willing to work toward the solution. Whether you are overspending $100 or $1000 each month, your recovery begins with a realization that this is not where you want to be. So pause and consider, then decide to start the recovery program in earnest.

2. Cut Spending to a Bare Minimum

In a first-aid situation, an EMT first checks breathing and then stops the bleeding. We stop the “bleeding” financially by suspending all spending that is not absolutely necessary. This can’t be done indefinitely, but it is a necessary first step in stabilizing your financial condition. So trips to the mall are out.

No pizza for a few weeks and that cruise you wanted will have to leave port without you (this time). This is an emergency. If you work hard now, you will make a full recovery – if not, your situation will be terminal.

The goal of putting a freeze on spending habits is to generate an excess – “working capital” so to speak. Credit cards sink so many people because they are viewed as an additional revenue source rather than a purchasing convenience. To reverse the trend you must “balance the budget” while creating excess to pay down the credit used in the past.

3. Find Some Money

We aren’t suggesting a loan, we are encouraging you to look around your house for unneeded items that can be turned into cash. Think about selling large items you no longer use– exercise equipment, musical instruments, furniture, or collectibles.

Read this article about 4 successful Retail Arbitrage families. They’re earning a full-time income buying used or discounted stuff and reselling it on Amazon, eBay, and other online sites.

Many people we’ve helped had clothing items purchased at the mall, still in wrappers, with price tags on them.

These items can usually be returned for cash or at least a credit on your credit card. Many items are purchased on impulse and never used, so look around – you’ll be amazed at what you find.

\We know it’s uncomfortable and you don’t want to inconvenience a sales clerk, but can you stand a little discomfort and possible embarrassment to reach the goal of total recovery? Sure you can!

4. Have a Garage Sale

Unnecessary clothing, sports equipment, tools, and home décor items can all be turned into cash at a garage sale or consignment store. A local newspaper near our home offers free classified ads. We have sold numerous items through the paper for much more than we were offered at a garage sale.

If you want to know how to host a profitable garage sale, read our Ultimate Guide to Hosting a Winning Garage Sale.

5. Earn More

Is it time for a raise? If you have been doing a good job and can document your value, then ask for a raise. If you’ve been slacking, work harder and smarter, make yourself more valuable to the company, and then ask the question. Is it time to change jobs?

Whip your resume into shape and start circulating it – read this article on new ways to conduct a job search. Any effort you put into earning more income will help. We are not saying to go out and get a second job. Many people have the notion that the only way to recover is to work more hours or get a second job.

While this will provide more income, it can add stress to an already overwrought family situation. Rather than working more hours, spend time focusing on reducing your household expenses and managing your debt reduction plan.

6. Cut the Cable

One of the toughest parts of the recovery from “debt-a-holism” is saying no to the costly little pleasures you’ve become attached to – cable TV, high-speed Internet access, a leased car, daily newspaper delivery, lawn service, magazine subscriptions, and dry cleaners, just to name a few.

RELATED ARTICLE: Free Online Movie and TV Sites

All these items have come up as issues in families we’ve helped dig their way out of debt. We call them “sacred cows” – those things that feel good and are seemingly impossible to release. Pause again. The “doctor” says you’ll make a full recovery, but, some things are detrimental to your healing. Are you willing to let them go for a time?

Are you willing to look for other options?

The daily paper was one such sacred cow for a family we were helping. Once the husband let it go, he realized that someone had been bringing a newspaper to work each day and he could meet his “need” during lunch at work for free. Look for options.

7. Make Your List and Check It Twice

Debt Repayment List with debts listed from smallest to largest.

This is an example of a Debt Repayment list with all creditors listed. Debts are lined up from smallest to largest. You can download a free copy of our debt repayment list at the bottom of this page.

Pull out all your credit-card bills, late utility bills, student loans, and car payments. Make a list of loans from friends and family, rent due to long-forgotten landlords or anybody you have borrowed from and haven’t paid back.

Now organize the list from the smallest amount owed to the largest. If you think of a debt you forgot, just insert it into the list and keep going.

Disregard, for the moment, interest rates and length of the loan – just make the list.

8. The battle plan

With the excess generated, you need to pay everyone something even if it’s just five dollars. Take whatever excess you’ve managed to accumulate and divide it so that you are putting some of it into savings and the rest on the smallest debt.

Using this method, you can usually eliminate the first debt from your list in a relatively short time. Then apply the monthly excess you’ve created and the payment you allocated to the first debt and pay it to the second debt.

Radio personality Dave Ramsey calls this method the “Debt Snowball.” You will definitely pick up momentum, encouragement, and emotional satisfaction as you cross one debt and then another off your list.

Why put money in savings? Why not just put it all on the debt? Great questions. The main reason is to build an emergency fund so that in the case of some unexpected occurrence, you aren’t tempted to pull out the plastic and charge it.

Make the Call 

An antique black rotary phone.
The telephone is one of your most powerful tools in dealing with creditors. Communicate honestly and return their calls.

If creditors have been hounding you for payment, you need to call them back. But before you do, get to know your rights as a consumer.

Study the Fair Credit Collection Practices Act. It sets guidelines and limits for collection agencies and how they can approach you to collect a debt. This act is governed by the Federal Trade Commission. You can call them or visit their Web site for specific information at

Once you know your rights, call the creditors and communicate your plan. Let them know what you intend to pay – even if it is well below the minimum. Ask them to suspend interest after a couple of months of faithfully executing the plan.

You may be amazed at their cooperative nature when you become trustworthy in your communication.

How to Destroy Debt forever - You can be debt free

9. The Payoff  

An interesting phenomenon occurs with successfully eliminating a couple of debts from the list. We call it “Repayment Intoxication.” You’ll feel so good, you may want to go too fast and land yourself in a financial bind.

We’ve seen people so exuberant about eliminating their debt that when a bundle of unexpected cash came their way, rather than carefully planning the disbursement of the money into savings and to the appropriate debt, they quickly paid the whole sum to one creditor, and the good that could have occurred was diluted.

RELATED ARTICLE: Debt Free Living and Debt Freedom Stories

Pause again. Get some counsel. Plan. Be a steady plodder. Impulsiveness is one of the reasons people end up abusing credit; impulsiveness in the repayment of debt can be almost as dangerous.

Keep a journal of dates that “miracles” occurred – unexpected money came in, significant payoffs, and especially DF (Debt-Free) Day. This list will serve as an encouragement to complete your course – to finish the fight.

Debt Freedom Wrap-Up

Are you feeling overwhelmed or encouraged? If you’re serious about getting out of debt, your emotions will bounce between the two frequently. We have walked this path with scores of people.

The lacerations, contusions, and shock from a head-on collision with debt can be completely eliminated with a carefully applied treatment of self-control and focused attention. The prognosis is good; your condition is not fatal.

Many have made a complete recovery, within 18 months, with spectacular results. You can too. Just take your medicine and exercise every day. Exercise self-control and say no to unplanned, impulsive purchases.

We have created a debt repayment tracking sheet. You can download our Debt Repayment List here

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