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7 Easy Steps to Become Completely Debt-Free

A lot of people worry about debt.

With college loans, credit cards, mortgages, car loans, and other payment plans, the average person in America owes more than their annual salary. Because of the great levels of debt, many people aren't able to live the lifestyle that they truly want.

Some people even have the audacity to buy things they can't afford. When I was an insurance agent, I remember an older lady telling me that she didn't own the comfortable coach I was sitting on. As her husband tried to quiet her down in embarrassment, she muttered, "We're only paying $33 per month, but it will be paid off next year."

Even though most of us have over a dozen years of schooling, we never really learned about money, let alone debt. Our credit system is against our best interest (no pun intended) and we must be strategic in how we handle our financial affairs.

As someone who has paid off a ton of debt, I am totally qualified to share with you the secrets I’ve personally used and shared with numerous individuals. These strategies will work for anyone who is committed, patient, and disciplined enough to pay off their debts completely.

Here are 7 Easy Steps to Become Completely Debt-Free:

1. Acknowledge Debt: When our debtors send us a bill in the mail, it's easy to ignore it. After all, most people are so consumed with their daily lives that they have little time to acknowledge their debts. Instead of running away from it, you must resolve to take action. The fact is that debt must be acknowledged if it is to be mastered.

Sometimes it helps to get your loved ones on board with your efforts. Your friends and family can help you reach your goals if you share your intentions. When you get your mind in order by becoming conscious of your debt, it's time to organize your numbers and deal with them strategically.

The borrower is slave to the lender. -Proverbs 22:7

2. Know What You Owe: Once you understand your debt, it's easy to pay it off. However, you must find out exactly what you owe. This includes learning about your interest rates too. For instance, you might have a debt from 12 months ago that was $10,000, but it may be closer to $12,000 because of the impact of interest rates. There's a big difference in $2,000.

To begin, create a ledger on paper regarding your debt. Make phone calls to your debtors and record the following information: name of the debt, amount owed, the APR (Annual Percentage Rate), and the payoff time-frame. An example of the payoff time-frame goes like this: if you pay $200 per month, your debt will be gone in seven years. Knowing the actual scenario of your debt payoff gives you a realistic picture of when you'll become debt-free.

Stop fearing, start preparing! -Daniel Ally

3. Negotiate APR: Once you find out all your Annual Percentage Rates, you can negotiate them down. Sometimes a simple 10-minute phone call with your creditor can do this. It might not work every time, but if you promise your creditors that you will pay off your debts, they are likely to lower your APR. They can also remove fees or penalties, if you ask.

Sometimes you can even lower your APR by paying your loans online. For instance, you can get a .25% reduction in college loans if you pay online. This means you can potentially save thousands of dollars by making an easy decision to go paperless. The marketplace will always reward you, especially if you search for the secrets.

Be fearful when others are greedy. Be greedy when others are fearful.

-Warren Buffett

4. Prioritize Your Debts: Before you pay off your debts, you must be smart about it. Some people use the snowball technique, where they pay the smaller debts off while paying the minimum on the larger ones. Others might prefer to pay off the highest APR and/or biggest debt amounts first. Either way, you must prioritize your debts according to your own situation.

While it's always good to pay your debts, some debt situations are more challenging than others. Therefore, you should select the method that fits your needs. Some people might feel better with less bills, while others might feel victorious with lower dollar amounts. Either way, once you prioritize your debts on paper, you will gain more clarity from your efforts.

Prioritization is doing first what matters most. -Daniel Ally

5. Pay Aggressively: Once you've negotiated your APR and prioritized your debts, it's time to pay your debts aggressively. This means that you're paying the maximum amount on the debts you've chosen. If you have additional income, you can also put a portion of it towards your debts instead of saving it all.

Paying aggressively is easy, if you have the right plan. I know some people who have even sold their liabilities (vehicles, furniture, luxuries, etc.) to get it done. The best part about this is that you can beat your original timeframe for debt payoff. Instead of eleven years, maybe you can could pay it off in five years. It's a sacrifice that might be worth it.

A man who pays his bills on time is soon forgotten.-Oscar Wilde

6. Be Patient: Along the way, there will be a temptation to use your money for luxury instead of debt payoff. DON'T DO IT. When it comes to conquering debt, you must stay disciplined. If you want luxuries, try to find a way to earn additional income. Otherwise, continue to pay off your debt until it is completely obliterated.

It takes inner fortitude to master your debt. However, if you are consistent you will build momentum. Dollar by dollar you should feel more confident about your future. Furthermore, you gain overall clarity because you've been proactive with your money. This will lead to more opportunities which you can act upon immediately.

Patience is the best remedy for every trouble. - Plautus

7. Resolve to Stay Debt-Free: Once you are debt-free, your creditors will thank you for your efforts by sending credit card offers. Don't take them unless you need them. If you absolutely need the credit, consider all your options and rates. If you use the credit, be sure to pay it off immediately. If not, celebrate by cutting them up.

Another great way to remain debt-free is to teach others. Even though you might not be a full-time teacher or professional speaker, you can still do your part by writing an article or giving speeches. When you share your story with others, it gives you the satisfaction of knowing that you've helped others to accomplish their financial goals.


Paying off debt takes time, especially if you have a fixed income. For those who have the ability to earn additional income each month, go ahead and do so. Use the additional income to pay off your debts faster. If you do, you'll pay off your debt sooner than expected. Either way, consider these steps and write me a note about your accomplishments.

Like. Comment. Share. Get the Word Out There!!!

Daniel Ally

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