We won’t spend a lot of time talking about debt reduction at Money Boss. I want this site to focus on advanced personal finance skills, not the basics. Besides, I’ve come to believe that debt reduction ought to be a side effect and not a goal.
Having said that, I realize that a lot of you are probably still struggling to get to square one. To that end, this article is meant to be a definitive guide to getting out of debt. Much of this material is reprinted from my Get Rich Slowly course (which, in turn, borrowed it from other articles I’d written in the past).
Before you can begin repaying your debt, you must be earning a profit. Unless your income exceeds your expenses, your debt is actually increasing. If you’re continuing to add debt, or if you’re only able to make minimum payments, you must first reduce your overhead and increase your revenue until you have a positive cash flow.
After you’re earning a personal profit, you can (and should) make debt elimination a priority. [Read more…]