This is Step One of our five-part series on creating your Financial Empire

If you have debt, you want to figure out how much debt do you have and what to pay off first.

First, separate your consumer debt from your non-consumer debt.

Non-consumer debt usually includes your mortgage and student loans. Consumer debt may include credit cards, personal loans and car debt. Begin with listing your consumer debt first.

If you do not how much you owe or to whom, you can start by pulling your personal credit report:

Experian www.experian.com 1-800-397-3742

TransUnion www.transunion.com 1-800-888-4213

Equifax www.equifax.com 1-800-685-1111

Or you can go to www.annualcreditreport.com and pull all 3 reports from each company. You are allowed to do this free once a year.

Dispute all debts that does not belong to you or that is paid off already. Any accounts beyond 7 years should be automatically dismissed. Seven years is the statue of limitations of any consumer debt, it maybe less depending on your state.

Once you have knowledge of the debt that you legally owe, you are ready to start paying down your debt. You can start paying off your high interest rate first or you can go by the lowest balance first. Pick whatever strategy you are comfortable with.

From there, start a system where you can throw any extra cash towards paying down debt. There are only two effective ways to get extra cash flow:

Earn more income

or

Decrease your expenses

The choice is yours. Decreasing one’s lifestyle (cutting out some expenses) probably is easier and faster to do than earning more money. However, I encourage you to do both.

This process may take anywhere from six months to 3 years depending on how deep you are in consumer debt. Try your best to avoid debt consolidation companies looking for a quick fix; you can do the exact same thing they can do. No need to pay a company to do what you can do.

You may want to downgrade your car or take on a second job just to expedite the process.

This is the hardest part of creating your financial empire. Debt is easy to get into and yet hard to get out. A two income family may be able to get out of debt faster compared to a single income family. Regardless of where you stand stick to your debt plan, don’t give yourself excuses not to pay it off. Set a payoff date and stick to it.

The reason why most people don’t get out debt is because it’s not hurting them yet. They are not fed up! They are still comfortable in their debt cycle lifestyle. Please do not get wrap up into that comfort zone. Get mad and get out of debt.

Getting out of consumer debt should be the first step of building your empire.