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Earn a high-yield savings rate with JG Wentworth Debt Relief
Becoming debt-free in just six months is an ambitious goal, but with dedication, careful planning, and decisive action, it is possible. This guide will walk you through the steps to assess your situation, create a plan, and execute strategies to eliminate your debt rapidly.
Keep in mind that this aggressive approach may not be suitable for everyone, especially those with large amounts of debt or low income. However, the principles outlined here can be applied over longer periods as well.
Assess your current financial situation
Before you can create a plan to become debt-free, you need a clear picture of your finances:
List all debts:
- Credit card balances.
- Personal loans.
- Medical bills.
- Any other outstanding debts.
Note for each debt:
- Total amount owed.
- Interest rate.
- Minimum monthly payment.
Calculate your total debt
To do this, gather all debt information:
- Credit card statements.
- Loan documents (personal, auto, student, etc.).
- Mortgage statement.
- Medical bills.
- Any other outstanding debts.
Add up all the individual debt balances for your total figure.
Review your income:
- Monthly take-home pay.
- Any additional income sources.
Track your expenses:
- Fixed expenses (rent, utilities, insurance).
- Variable expenses (groceries, entertainment, dining out).
Calculate your disposable income:
- Income minus essential expenses.
Create a realistic 6-month plan
Now that you have a clear view of your finances, it’s time to create a plan:
Set a specific goal:
- Total amount of debt to be paid off in 6 months.
Determine monthly payment required:
- Divide total debt by 6 to get the monthly target.
Compare required payment to disposable income:
- If the required payment exceeds disposable income, you’ll need to increase income or decrease expenses (or both).
Choose a debt repayment strategy:
- Debt avalanche: Focus on highest interest debt first.
- Debt snowball: Focus on smallest debt first for psychological wins.
Create a month-by-month payment schedule
- Commit to paying the same total amount towards debt each month, even as individual debts are paid off.
- Set up automatic payments to ensure consistency.
- Monitor progress and adjust the plan as needed.
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Increase your income
To accelerate debt repayment, consider ways to boost your income:
- Ask for a raise at your current job (or take on a part-time job).
- Take on overtime hours if available.
- Start a gig economy side hustle.
- Have a garage sale / sell off unnecessary items.
- Offer services like pet-sitting or house-cleaning.
Reduce your expenses
Cutting expenses frees up more money for debt repayment:
- Create a bare-bones budget to eliminate non-essential spending.
- Cut subscription services you’re not using frequently.
- Consider moving to a cheaper place or negotiate rent with your landlord.
- Lower utility bills by implementing energy-saving measures.
- Reduce transportation costs by using public transportation or carpool.
- Cut food expenses by cooking at home instead of eating out.
Negotiate with creditors
Lowering interest rates or payments can help accelerate debt repayment:
- Call credit card companies and ask for lower interest rates.
- Explore balance transfer options with 0% APR offers (just be aware of balance transfer fees).
Consider debt consolidation
This involves combining multiple debts into a single loan or credit card.
- Personal loans with lower interest rates.
- Home equity loans (if applicable and appropriate).
Manage your cash wisely
It’s crucial to be smart about your money while you’re paying off your debt.
- Apply tax refunds, bonuses, or gifts to debt
- Use cash for daily expenses to help control spending and avoid new debt.
- Lock away credit cards to avoid temptation.
Stay motivated and celebrate progress!
Maintaining motivation is crucial for rapid debt repayment:
- Use visual aids like a debt thermometer or chart.
- Color in progress to visualize success.
- Set small rewards for hitting targets (just ensure they don’t derail your progress).
The bottom line
Becoming debt-free in 6 months requires intense focus, sacrifice, and hard work. It may not be achievable for everyone, but the strategies outlined here can significantly accelerate your debt repayment journey. Remember, the key is to increase income, decrease expenses, and apply as much money as possible to debt repayment.
Even if you can’t eliminate all debt in 6 months, implementing these strategies will put you on a fast track to financial freedom. The habits and skills you develop during this process will serve you well long after you’ve achieved your debt-free goal.
There’s always JG Wentworth…
If you have $10,000 or more in unsecured debt, there’s a good chance you’ll qualify for the JG Wentworth Debt Relief Program.* Some of our program perks include:
- One monthly program payment
- We negotiate on your behalf
- Average debt resolution in as little as 48-60 months
- 24/7 support
- We only get paid when we settle your debt
If you think you qualify for our program, give us a call today so we can go over the best options for your specific financial needs. Why go it alone when you can have a dedicated team on your side?
About the author
This information is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that You consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.
* Program length varies depending on individual situation. Programs are between 24 and 60 months in length. Clients who are able to stay with the program and get all their debt settled realize approximate savings of 43% before our 25% program fee. This is a Debt resolution program provided by JGW Debt Settlement, LLC (“JGW” of “Us”)). JGW offers this program in the following states: AL, AK, AZ, AR, CA, CO, FL, ID, IN, IA, KY, LA, MD, MA, MI, MS, MO, MT, NE, NM, NV, NY, NC, OK, PA, SD, TN, TX, UT, VA, DC, and WI. If a consumer residing in CT, GA, HI, IL, KS, ME, NH, NJ, OH, RI, SC and VT contacts Us we may connect them with a law firm that provides debt resolution services in their state. JGW is licensed/registered to provide debt resolution services in states where licensing/registration is required.
Debt resolution program results will vary by individual situation. As such, debt resolution services are not appropriate for everyone. Not all debts are eligible for enrollment. Not all individuals who enroll complete our program for various reasons, including their ability to save sufficient funds. Savings resulting from successful negotiations may result in tax consequences, please consult with a tax professional regarding these consequences. The use of the debt settlement services and the failure to make payments to creditors: (1) Will likely adversely affect your creditworthiness (credit rating/credit score) and make it harder to obtain credit; (2) May result in your being subject to collections or being sued by creditors or debt collectors; and (3) May increase the amount of money you owe due to the accrual of fees and interest by creditors or debt collectors. Failure to pay your monthly bills in a timely manner will result in increased balances and will harm your credit rating. Not all creditors will agree to reduce principal balance, and they may pursue collection, including lawsuits. JGW’s fees are calculated based on a percentage of the debt enrolled in the program. Read and understand the program agreement prior to enrollment.
JG Wentworth does not pay or assume any debts or provide legal, financial, tax advice, or credit repair services. You should consult with independent professionals for such advice or services. Please consult with a bankruptcy attorney for information on bankruptcy.
