The Secret to Having Zero Debt

Everywhere you turn, there's another finance guru trying to sell you their latest guide to getting out of debt...another company trying to make money off your misfortune. The secret none of them want you to know is that there is no secret. The way to get and stay out of debt is simple in theory, and you don't need complex guides or books to figure it out. The difficult part is committing yourself to doing it. It's hard work, and no one is going to do the work for you. Here's what you need to do:

Don't spend money you don't have. If you're in debt and really want to get out, you must cut out all unessential spending. That means no more cable TV, no more cell phone, no more eating out, etc. (See how much you can save with some of our personal finance calculators.) If you don't have the money, you don't spend it. Without following this rule, you'll never be able to get out of debt.

Pay off your debts as quickly as possible, starting now. To pay off your debt(s) quicker, consider consolidating your debts into a lower interest loan with the shortest possible term. If you can't get a loan due to bad credit, then you should use the "rollover method" of accelerated debt payoff, making fixed payments instead of minimum payments. In any case, you need to start today. Every day you wait will cost you more in interest.

It's not going to be easy, but it really is that simple. You don't need to buy anything from anyone in order to get out of debt. In fact, you need to do just the opposite...quit buying things you don't absolutely need. Use our free financial calculators to figure out exactly what's best for you, make a plan, and stick to it.

Of course there are some exceptions, medical emergencies for example, that require you to spend money you don't have. And these exceptions can be extremely costly. You should do everything you can to prevent such expenses (i.e., quality health, home, and auto insurance), but even then you may find yourself in a terrible situation. If you do, it's very important to make the best deal possible. You'd likely be better of arranging to pay a hospital directly than charging a treatment to your credit card for example. You should also contact your lenders and try to negotiate a better interest rate. Finally, if you're overwhelmed with debt due to an emergency beyond your control, you may have to consider bankruptcy...starting over from scratch.