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how to: get out of debt

If you’re ready to get out of debt and boost your fiscal fitness, you’ve come to the right place. Staring at that huge stack of bills, fielding the unpleasant phone calls -- even just knowing you’re in the red can really drag you down. Luckily, we’re here to help you get back up! We have tons of advice for getting out of debt, including credit card debt help and an easy-to-use debt calculator to help you pay off debt. You’ll also find debt advice on how to renegotiate your credit card debt and ways to improve your credit (even before you’re out of debt!). Not sure where to begin? Why not give our 7 simple steps to getting out of debt at try -- they will definitely help you find your financial footing. Tackling your debt as a twosome? We’ve got plenty of debt advice geared toward couples. Learn about financial basics for newlyweds, including how to choose the right bank and when to merge your accounts. Peek into real couples’ budgets and see how they fixed their finances. And if you’re wondering where to find all that extra money to pay off debt -- don’t worry, we’ve got that covered too. We have debt help and cash-saving secrets from financial pros, and the money tips that spending savvy couples must know -- plus saving secrets from fellow Nesties. Finally, check out our tips to help you stay out of debt for good -- set up a household budget, plan your paychecks, and get credit smart.

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4 Tips to Beat Debt Together

Clear out your calendar this weekend and tackle your finances as a team. The faster you do it, the better you'll feel.

1. Confess Your Sins

Now's the time to grab your partner and lay all your cards on the table. Pull out your bank and credit card statements, info on all your assets and debts -- basically everything related to your current and future cash flow. Also order your personal credit reports and compare notes. Learn all about your credit report here.

2. Survey the Damage

Get down to the nitty-gritty: How much do you owe? How much do you make? What are your pension funds, stocks, life insurance, or real-estate holdings worth? What are your monthly expenses? What do you pay for health and disability insurance? After all is said and done, what's left at the end of the month? Put this info into a spreadsheet.

3. Make a Plan of Action

Now that you have all your money owed and earned in one easy-to-read document, it's time to build a budget. Start with your combined monthly take-home income and subtract these categories (use a month's worth of past receipts and bills to help you):

Your Nest: rent/mortgage/maintenance, phone, electricity, cable, cell phone
Transportation: car payments, gas, public transportation, taxis, parking, insurance
Necessities: food and groceries, loan payments, medical bills, health insurance, new clothes, pet care
Investments: 401(k), CDs, IRAs
Fun Stuff: eating out, travel, music, grooming, gifts, gym membership, charity, miscellaneous splurges
Savings: "pay" a savings account at least 10 percent of every paycheck for two things:

  • Emergency Money: Your monthly budget (minus savings) multiplied by six months. With this "worst case scenario" money in the bank, you won’t have the added stress of going broke.
  • Fun Money: Keep $500 (or more) on hand so those eventual "splurges" (like a vacation) won't put you into debt.

4. Do Monthly Checkups

Review your budget monthly. If you go over, cut something next month. If you saved, congratulations -- put the extra money into savings and treat yourself to something small, like a lotto ticket. Remember, you'll need a surplus in your account around the holidays, birthdays, and anniversaries.

Nestpert Beth Kobliner, financial expert and author of Get a Financial Life: Personal Finance in Your Twenties and Thirties

Find more advice on getting -- and staying! -- debt-free

-- The Nest Editors

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