In February 2006, Oprah Winfrey told her TV viewers and everyone else in the United States to get out of debt. If you are in debt right now, you know how hard it is to get out of it. Because of this, Oprah and several financial experts came up with the Oprah Debt Diet.
The Debt Diet book by Oprah has a step-by-step plan for getting out of debt. It's important to remember that you won't get out of debt overnight. So, Oprah's step-by-step guide is important because it helps people who are in debt change their daily habits over time. If you are looking for a way to get out of debt, you should keep reading to find out about some of the steps in Oprah's Debt Diet.
Step 1: Figure out how much debt you really have.
This first step is very important because you can't get out of debt completely if you don't know how much you owe. The easiest way to figure out how much debt you have is to collect all of your current and past-due bills or to ask for a copy of your credit report. One of the three main credit bureaus, Experian, TransUnion, or Equifax, can easily give you a copy of your credit report.
Step 2: Get rid of any expenses that aren't necessary.
You probably get a soda or coffee at work, like many other Americans. These things cost a lot and add up quickly. Did you know that you could get out of debt much faster than you might have thought if you stopped buying things you didn't need? Tracking everything you buy for a week is a great way to figure out what you don't need to buy.
Step 3: Get to know your credit cards.
Many Americans pay late fees, annual fees, and interest rates that are too high without even realising it. The best way to avoid getting into credit card debt is to understand how it works. Also, you should know that minimum payments may sound great, but they are a financial death trap because they keep you in debt for longer. If you do step 2 right, you could use your extra money to pay more than the minimum each month.
Step 4: Learn to cut down on how much you spend.
Step 2 said to stop buying things you don't need. Getting out of debt is best done by not buying things you don't need, but this can be hard to do. People who can't control how much money they spend are told not to carry credit or debit cards with them. If a credit card is used, it is important to pay on time and pay as much of the balance as possible. It's also important not to get new credit cards or accept offers to raise your spending limit during this time.
Step #5: Make a plan for your monthly spending
A budget, which is another name for a monthly spending plan, is a great way to divide up money for necessary expenses. A monthly budget is best because you can plan for holidays, birthdays, and other events that only happen in certain months. Your budget should include all of your housing costs and expenses, transportation costs, other expenses, and any debt you owe.
Step #6: Think of ways to make more money.
When making a budget, many Americans find that they don't make enough money to cover all of their bills and debt. If you are one of these people, you might want to think about finding ways to make more money. Not everyone who needs more money has to get a second job. It can also mean changing the way you live. The Debt Diet suggests giving up your car if you can and moving if the costs of your current home are too high.
Step #7: Make a personalised plan to pay off your debt.
By putting your debts in order of importance, you can make a plan that fits your needs. This means that you will look at all of your debts and decide which ones you need to pay off first. When deciding what or who to pay off first, you should look at the date of the debt, how much it is, and what can happen if you don't pay it.
- Figure out why you spend money and try to change it.
When people are angry or sad, they often make purchases they don't need. You might also buy things on the spur of the moment or be addicted to shopping. No matter why you buy things you don't need, there are ways to stop. Sometimes this process needs help from a professional, but sometimes it can be fixed by doing other things.
The guests on Oprah's show were able to get out of debt by following her "Debt Diet," and there's no reason why you can't do the same. As was already said, it's hard to get out of debt, and it won't happen overnight. Don't give up if you get off track with any of the steps above. Try as often as you need to. If you follow the steps of the Oprah Debt Diet every day, you'll be on your way to being debt-free.
