How to get out of debt quickly

The reason I am writing this article is because about a week ago I talked to a couple who had started a “credit repair program” with a credit counselor. For a $2000 up front fee and $100 per month the credit counselor was going to help them get out of debt and rebuild their credit. The plan that they were on is the same plan that is taught by almost every financial advisor in the industry. What made me angry was the impact that $2000 and $1200 per year could have if it was used to pay down debt instead of being used to pay the expert. I explained my concern to the couple who told me, with what seemed to be a little bit of shame in their voice, that it was well worth the money to have the accountability. Without being forced to do it they would never complete the process on their own.
The most important step in trying to get out of debt is making yourself want to get out of debt. Let’s face it. It is fun to live a lifestyle that you can’t afford, but it’s not fun to pay the bills. Especially when the credit runs out. And believe me at some point the credit will run out. The question is how deep in debt will you be when it happens. Think about it for a minute. How badly do you want out of debt because it takes a lot of discipline and determination to get there.
Now that you’ve decided to start this journey here’s how to do it. If you have a lot of debt or any debt for that matter this step will seem crazy and difficult, but if you are disciplined and stick to it, it is a great way to payoff debt fast.
In my career I’ve seen this technique used many times by many and done any different ways. This is my favorite. Find all of the debt payments you have, include everything but your mortgage. Look at credit cards, personal loans student loans, vehicle payments, and sort them by balance from smallest to largest. I’ve seen people advise clients to sort their debts by interest rate so you pay off the debts with the highest rates first. The reason I ask you to sort them by balance is when you get started and you find yourself paying things off quickly you are more likely to stay motivated and keep going.
So, now you have your list. Take the money you set aside in your budget and put it with the minimum payment for the smallest loan. Continue to make this larger payment along with the minimum payments for all of your other loans until the smallest loan is gone. Next, take the amount you were paying on the small loan and put that with the minimum payment of the next largest loan is gone. When that loan is gone take the payment you were making and add it to the minimum payment for the next largest loan. Keep going until all of your debts are gone. Please be disciplined and give this process a try. Stay focused, you can do it.