Fastest,Best way to get out of debt ?

How much are you earning, and how much do you spend each month, outside of debt payments?

Welcome to the collective.

Stop as much other spending as possible—cut down on clothes, entertainment, almost everything.

Swear you will not accrue any more debt.

Pay the minimums on your big debts, and then put as much money as possible to paying off the small ones.

As each is paid off put that extra money toward the next one. Once you get a lot of the small debts gone, start concentrating on the big one with the highest interest rate.

Then, target them one by one in that order.

If you have access to a credit union with low interest rate, you could consolidate some into a single loanm with a small er monthly payment. Use anything you get from that to work the program outlined above.

Good luck.

Take your lunch to work. Don’t go out drinking with friends. Those two things alone can suck $100 a week or more out of your paycheck.

Not sure what your arrangement with your father us, but I am assuming your rent/utilities/food are cheaper there than if you lived on your own. As much as you want to be on your own, make sure you are on solid financial ground before moving.

Good advice from Marina, but I just want to add one thing: It’s important to pay off the debt accounts with the highest interest first – regardless of size. So if you have $1000 debt at 5% and $39,000 at 8% it’s better to work on the 39,000…

It may feel wrong in that you may as well get rid of the small one, but numbers wise it will cost you more.

the old fashioned way work your ass off and dont spend money on things you dont need

@Marina, whoa dang! Great answer! I would have given you 5x the lurve for that…
put in 4 more as a seed ;)

Using an amortization table, you can chart the payments and decide which to pay off. Its great to have the payments and their effects itemized like this…

You really should not move out until your debt has been taken care of – forty thousand dollars in debt is not something you need to be dealing with on top of paying for rent and utilities, which I assume you are not directly paying for now.

Debt, and solving it, is really easy. You need to put every damn penny you earn towards it, and not spend one penny on anything for yourself. Spending pennies on yourself is HOW you got to be in this situation, so it sure as stars won’t get you out of it. Get another job and put 100% of the earnings towards your debt. Stop going out with your buddies to drink all night at the bar, drink at someone’s home instead, or better yet don’t drink as much and do some low/no cost activity such as playing video games you already have.

40,000 is a lot of debt. You should probably talk to a debt counselor to see what information they can provide in optimizing your debt reduction strategy. Both Marina and btko have good approaches and neither is 100% right or wrong. The piece of information that is missing from determining which answer would suit you best is how much money you are making a year. If you are making minimum wage and pulling in less than 15 thousand a year, Marina’s strategy may leave you with thousands of additional spent dollars in interest that may have been avoided had you tackled the highest interest rate card first. Again, debt consolidators (some are scams, some are not) can help you negotiate lower interest rates or strategize to move your higher interest balances to lower interest cards.

The fastest, best way to get out of debt is to put your nose to the grindstone and earn $40,000 as fast as you possibly can. This means making more money and spending less of what you make, and pouring every single cent into the debt. The stricter you are with yourself, the faster you will get out of debt. It’s as simple as that. The next time you see a new pair of shoes, or a tasty burger, remember that you are Atlas with $40,000 of debt on your back, and buying that item would only add to your weight instead of alleviating it.

Call Clark Howard (a consumer advocate, 877–87 Clark. Or clarkhoward.com

I’d also add: break the habits that got you into debt in the first place. Figure out how and why you got $40,000 in debt and don’t do that any more. Also, track your spending—spend a month recording every penny you spend, so you know where your money is going.

Of course, you don’t say what kind of debt you’re in—$40,000 in student loans is not the same as a $40,000 mortgage or $40,000 in credit card debt. Dealing with each of these is different.

I’m not sure that you need to put every penny towards debt reduction, as @dynamicduo says—that’s a lot like quitting something cold turkey. If you deny yourself every luxury, you’ll fall off the wagon and go right back to your debt-incurring ways. But you can find a way of cutting your expenses and still getting the luxuries you like. For instance, if you find you’re spending $12 a day on Starbucks lattes, you’re better off buying an espresso machine for your home. It will pay for itself in savings in a couple of weeks. If you find you’re spending $8 to $10 a day on lunch at work, bringing your own can bring that down to $2 to $3 a day (and the lunch may well be better, too.) If you like hanging out with your friends and having a few beers, buy a case and hang out at someone’s house instead of at a bar.

As far as Marina’s advice versus btko’s advice—btko’s advice is financially sounder in a world where everyone behaves rationally, but Marina’s advice is much more satisfying to put into effect. The boost you get from saying, “There! That one is completely paid off may be worth paying a few extra dollars in interest for.

40G is a lot of debt. Is there a way to liquidate some assets to pay off some of it? I mean, a boat or motorcycle – large ticket items? If not, I would suggest continuing to live w/ dad and pay everything you can towards the debt. When I was very young, I got into some debt with MasterCard and once it was paid off, I never again owned a credit card. It’s just toooo easy to fall prey to the credit lure and once sucked in, it is very hard to get loose.