If you are in debt....

This website is not for those of us who lack the discipline to control our money. If you spend everything you make, or worse yet, more than you make, then we are not the group for you. Check out Dave Ramsey or others who will help you control yourself. The audience we are speaking to is not struggling with credit card debt.

These posts are written from those who are starting from nothing, not for those who are starting in debt, who have even less than nothing.

However, I feel that I must include a section on getting out of debt, especially credit card. Some of us may have messed up our finances in the past, but now have the discipline to control our money, and it is for these people that I am writing this post.

All the savings in my previous post on budgeting will be going towards paying off your credit card debt. Pay the minimum on all, and put all the rest on to the card with the smallest balance owed. Do not worry about interest rates. Get rid of the smallest one first, and, once it is paid off, redirect all the money that went to it to the next smallest card. This applies to everything, not just credit cards. Get the small out of the way, then the next smallest, then the next smallest. It will go much faster than you think.

If your debt is credit card, you should do a balance transfer to a zero percent APR for a year credit card, but continue making the same payments. For example, if you normally pay $100 on your card bill each month, sign up with a new credit card that has zero percent APR for an introductory period, transfer the balance to it, and continue paying $100. You will pay it off much quicker.

Do not worry about spending, emergency, or investment savings. You have your credit cards for emergencies - it will be far more advantegous to you to use the money to pay off your debt.

Continue with this strategy until all debt is paid off (large debts, such as a car or mortgage, are separate, you do not need to pay them off before beginning the saving and budgeting phase).

Once everything is paid off, pat yourself on the back. Congratulations! You no longer have a negative net-worth, you are worth zero, which is certainly better than being negative. At this point, all the money you were using to pay off the debt will become the savings that I mentioned in the previous post on budgeting. Now you can building up into the positive, creating your seed.