In order to get out of Debt in 2018 you need a plan of action and then you need to execute that plan. Here you will find a simple to follow five step guide to get you out of debt in 2018.

Important note before we begin:  You need to have an emergency fund. Something always seems to come up and when it does, you may end up back in debt and will need to start back at step 1 again. So put some money aside first, put it in an envelope, and then don’t touch it unless it’s a real emergency.

Here are the 4 steps you need to follow if you want to get out of debt in 2018.

Create A Realistic Smart Budget

In your budget you’ll list your income and your expenses. You need to have money left over every month or else you’ll never get control of your debt. Simple enough right?

If you can’t make ends meet, you will either need more money or less expenses. Since getting a second job may be out of the question, you will need to cut back and make sacrifices.

Finding what to cut back on

• Cell Phone Bill

One of the best ways to cut your monthly spending is to look at your cell phone bill. You can call your cell phone provider and ask them to audit your account to see if you can be placed on a cheaper plan based on your past usage.

• Cable TV

You should also look at your cable/satellite bill. Are you paying for channels you don’t need? Do you have a DVR you can live without? Better yet, can you live without cable and choose a cheaper option like streaming through Roku, Amazon Fire TV and Netflix?

• Restaurants

Finally, you can tackle unnecessary expenses such as Starbucks coffee runs, fast food trips and nights out at Olive Garden. If you’re unwilling to make these sacrifices, then you are truly not serious about getting out of debt in 2018.

Putting your leftover money to work

After you’re done creating your budget, how much money is left over? The money left over in your budget will be the amount you can pay every month toward your debt. Make sure it’s at least $200 per month or you will not make a dent in your debt.

Make your budget flexible

As you continue working on your ‘get out of debt plan’, you will of course need to continue to make adjustments to your budget along the way. This is normal and expected. But if you want to budget for something new, you’ve got to get rid of something else.

Make A List Of Your Debts

I know you’ve probably avoided even looking at your debts because you’re afraid of just how bad it is. But if you want to tackle this monster you need to know what you’re up against first. So gather up your recent statements for all of your Credit cards, auto loans and other personal loans and see the complete picture of what you owe.

List these debts on a piece of paper with the name of the debt, total amount owed, interest rate and monthly payment.

Don’t forget to write down all of your debts, including old unpaid medical bills and personal loans from family members. We’re going to destroy all of your debt in 2018.

The way you’re going to do this is like this:

Credit Card Spending Freeze

First, implement a spending freeze on your credit card accounts. It’s impossible to pay off debt if you continue accruing it!

Start With High Interest Debt

Second, we will tackle high interest debt gets eliminated first. These are the ones that are costing you the most.

Write Down Your Progress

Third, you will write down your progress as you continue eliminating your debts one by one. You need to keep track of your victories too.

Lower Your Interest Rates

If your credit score is bad, it can be difficult to get companies to lower their interest rate. But if you have begun paying down your debts already, it’s possible that your credit score today is better than it was when you got your debt in the first place.

Even though most don’t recommend borrowing from Peter to pay Paul, this strategy works.

You need to first get a low interest loan: either from a bank, a friend or even by opening up a new credit card.

Use A Balance Transfer

Many credit cards offer 0% interest rates on balance transfers for up to 18 months. Take advantage of these offers and then move your high interest credit card debt over to this account.

I have personally used this to get rid of a $5,000 debt at a 29% interest. I moved it over to a zero percent credit card and got it paid off in 18 months! It’s true, with a monthly payment of $278, I got rid of a debt in 18 months that would have taken me more than 2 years and an extra $1,500 in finance charges to pay off.

Consolidate Your Debt At Lending Club

Lending Club is a popular option for those who want to combine all of their debt into one large payment at a lower interest rate. The way it works is simple, you apply for a loan, submit documents such as paystubs, and after they check your credit, they make an offer. If that interest rate offered is lower than your current ones, it makes financial sense to switch your debt over.

Trade Your Car

Are you still stuck making high car payments? If you want to truly eliminate your debt in 2018 you’ll need to make some changes. You can choose to sell your car and instead buy a more economical one at a much lower payment.

Track Your Progress And Adjust

Now that you have a plan of action, don’t relax and get comfortable. Work is still required to keep you on track. Monitor your behavior and track your progress to ensure you’re still on the right track to becoming debt free in 2018.

Monitor Your Credit Score

Use the Credit Karma app to check your credit score. If you are lowering your balances and paying off debt, your credit score should improve every month.

Celebrate Your Wins

Did you just pay off a high interest debt or an account that was in collections? Congratulations! Celebrate your wins, no matter how big or small. It will keep you motivated to continue on this journey.

Adjust Your Plan

Did you just get a raise at work, a bonus or an unexpected tax refund? Time to party right? No! Your number one goal in life is to pay off your debt in 2018, so be sure to put any extra money toward your goal. It will only help you get out of debt faster.

Listen, just like shedding pounds at the gym, getting rid of your debt takes time. In this fast paced world of smartphones and breaking news, we all want things to happen right away. But the one trait that will help you get out of debt in 2018 is perseverance. Don’t give up and keep your eyes on the prize. I know you can do it and you have to believe in yourself too.

Thank you for taking the time to read this and I hope this step by step guide to getting out of debt in 2018 has been helpful.

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