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Start Managing Debt

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“Pay off your debt first. Freedom from debt is worth more than any amount you can earn." 
– Mark Cuban
 
Steps to Get Out of Debt.  Escaping debt will take intense focus and dedication.  You may have wandered into debt, but you can't wander out of it, and you can't borrow your way out of debt either.  The secret to debt management is self-management.  Here are some straight forward steps to get out of debt:
 
  1. Quit borrowing more money.
  2. Save money in an emergency fund.
  3. Sell something you don't really need.
  4. Get a job, another job, a better job, or work overtime (temporarily).
  5. Use the Debt Snowball method to pay off debts.

Pay Off All Debt (Except the House). The second step of personal finance, after establishing a small emergency fund and paying your bills on time, is to pay off your car, credit cards, student loans, and any other outstanding balances.  Start by listing all of your debts except for your mortgage. You can use this Debt Calculator to project your payoff options.

Use the Debt Snowball Method. The debt snowball debt-reduction strategy can help you pay off your debts. Start by listing all of your debts except for your mortgage from smallest to largest – regardless of interest rate.  Pay minimum payments on everything but the little one, then pay as much as possible on your smallest debt.  Once that one is gone, take its payment and put it toward the second-smallest debt (while still making minimum payments on the rest).  You will continue gaining momentum as you knock out each remaining balance – that's what's called the debt snowball method.

Access Debt Management Tools and Programs. Read through special articles on your types of debt to learn all about credit cards, tax debts, student loan forgiveness programs, and more. Check out these resources to start: Kick Debt to the Curb, How to Pay Off Student Loans Quickly, and Student Loan Forgiveness.

Learn how to save money, start budgeting, and avoid debt by requesting free access to our Foundations in Personal Finance platform. Click here to request access today.

Foundations in Personal Finance

Disclaimer
The Norco College Financial Freedom program helps students develop financial literacy and learn healthy financial habits by providing general information for educational purposes only. Staff who meet with students provide resources and guidance on a variety of topics, but do not provide investment, legal, or tax advice. Furthermore, any links to third-party resources or services are provided as a convenience and are for information purposes only. Norco College does not endorse or approve any of the products, services, or opinions of the entities associated with these links. If you need advice applicable to your specific financial or tax situation, please consult with a professional.
 
* The Norco College Financial Freedom program is sponsored by the Title V “PACES" Grant (Pathways to Access, Completion, Equity and Success).  The PACES project is funded by the U.S. Department of Education's Developing Hispanic-Serving Institutions (DHSI) program (Grant P031S190318).