Debt elimination requires that, first, you
stop spending money on anything that is not a necessity.
If you think that eating out or going for happy hour is a
necessity, you are not going to succeed at debt
elimination.
Necessities include housing, food, clothing, transportation,
etc... Decide with conviction, that until you are back on track,
no money will be spent except for necessities.
You are now going to take the following debt
elimination steps:
- Make a list of all of your revolving debt - this includes
charge cards, car loans, personal loans, anything you have
purchased on which you are making monthly payments.
- Beside each item, list the total amount owed and then
the minimum monthly payment required.
- Divide the total owed on each item by the minimum payment.
This will give you a "monthly" total to pay it
off. (This is not the actual number of months).
- Find the debt that has the smallest number of months.
This is number 1. The next smallest number of months becomes
number "2," and
so on. You now know the order in which you are going to pay
these debts off.
- Pay as much money as you possibly can on #1, paying the
minimum on all others. As soon as #1 is paid off, take all
of that monthly payment and plunk it on #2. Proceed this way
until your debt is down to a reasonable amount, certainly an
amount that is not creating stress and anxiety.
For some people, debt elimination can take a few years. Vow
to stick with it. You do not want to spend the rest of your life
stressing out and avoiding creditors' calls
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