How To Get Out Of Debt In 10 Steps
Over the years I’ve evaluated many debt elimination systems The
best one I’ve ever seen is also one of the simplest So let me
introduce you to
The Best Iron-Clad, No-Holds-Barred, Fool-Proof,
No-Fine-Print, Debt Elimination System Ever Developed – Bar None
Just follow the following 10 steps
1 Go back one year and record all of your expenses You need to
go back that far to make sure you account for seasonal spending
Check bank statements, cancelled checks, credit card statements,
anything your spending money on
Carry a little notebook with you for a couple a weeks and record
anything your spending cash on For example, that cup of
Starbucks coffee that you can’t seem to do with out You’ll be
amazed at how much is falling through the cracks on that kind of
stuff I realize that this part is a pain But the payoff will
be tremendous
2 Divide your expenses by 12 to get your average monthly
expenses
3 List the balance owed for all of your debts, including your
mortgage If you can’t find it from your records, call your
creditors and lenders and ask them
4 List the minimum monthly payment for all of your debts What
is the total of all your minimum monthly payments? Let’s say,
for example purposes, the total is $2,000 per month
5 Divide the balance owed by the minimum monthly payment for
each debt This will give you the number of months it will take
to pay off each debt assuming the minimum monthly payment
6 Rank your debts by how many months it will take to pay off
each one The fewest number of months all the way down to the
most number of months
7 Prioritize your debts by the number of months it will take to
pay off each one (again, assuming the minimum monthly payment)
Your highest priority debt is the one that you can pay off in
the fewest number of months Your lowest priority debt is the
one that will take you the most number of months That will
probably be your mortgage
8 Okay, in step Number 4, you totaled your monthly payments on
your existing debts We are using as an example a total of
$2,000 Take 10% of that total, or $200
9 Re-direct $200 that you are already spending on something
else to apply to getting out of debt Don’t tell me that you
can’t find the $200 because you can I’ve worked with thousands
of people in helping them improve their financial lives and I
know you can do it It may come from $20 here, $25 there, $30
from this other thing, but it’s there We all spend more than we
think we do
10 Apply the $200 to your highest priority debt It will be the
one that you can pay off in the fewest number of months For
example, if the minimum monthly payment on your highest priority
debt is $200, you are now paying $400 per month toward paying
off that debt
Once that debt is paid off, you now have $400 a month to apply
to the second highest priority debt For example, let’s say the
minimum monthly payment for your second highest priority debt is
$250 You are now paying $650 a month on that debt ($250 +
$400)
When that debt is paid off you have $650 a month to apply to the
next highest priority debt You keep doing that until your
completely out of debt including your mortgage
The beauty of this system is that you’ll be totally debt-free in
just a few years and the only extra money that you committed to
paying off your debts is the original $200 that you applied to
your highest priority debt
Also, you now have $2,200 a month ($2,000 minumum payments on
all your debts plus the $200 extra commitment) that you now can
apply to investments And it’s those investments that are going
to make you financially free
Visit
t-Wisdomcom for your common-sense guide to debt-free
financial freedom
Copyright 2005
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