No More Debt

I recently graduated from college in 2004. What is the easiest way to get out of debt? I have four credit cards, a car loan, car insurance, and an apartment. Over the next year, I would like to purchase a house but I don’t want to add to my financial burden.
— C. Gilberry, Via the Internet

The good news is that you recognize that your financial burden is becoming overwhelming. The bad news is the process to eliminating debt is not necessarily easy, but doable.

First, look at your income. Write down how much money you actually have coming in. Next, review your bills and write down the due date, monthly payment, total amount owed, and the interest rate.

You can reduce debt by totaling all of your bills and subtracting that amount from your income. If the amount is positive, say $300, take a portion of that money and add it to the bill with the highest interest rate.

The best place for you to implement this process is with your credit cards. Give yourself one to two years to get out of debt, then read our Homeownership series (March 2006–July 2006) to get started on the road to homeownership. Also, read Zero Debt by Lynnette Khalfani (Advantage World Press; $14.95).