4 steps to start your debt elimination program today

Are you tired of sending most, if not all, of your paycheck to the bank or credit card companies? If so, you are not alone. Many Americans send a significant portion of every paycheck to others. In fact, due to debt, many Americans are only two or three pay periods away from losing everything. And, banks and credit card companies like it that way. If they can keep you paying only the minimum payment, they can make thousands of dollars over the life of your outstanding balance. That money could be yours. Stop the madness. Start your debt elimination program now.

How do I get off the treadmill and start eliminating debt? In the next few posts, we'll discuss four steps to get you started.

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Step 1: Commit to eliminating your debts.

Sounds easy, but it isn't. Depending upon how much debt you have, it could take several years, and significant discipline. However, the rewards are well worth it. To motivate you, consider this. If you make $50,000 per year and could eliminate your $300 per month car payment, that would be the same as giving yourself a 7.2% raise. Imaging how much bigger your paycheck would feel if you also had no credit card debt. Now, imagine your mortgage gone. In my case, all these added up to around a 50% increase in take-home pay without relying on anyone else but me. Further, imagine how much less stressful your job would be if you didn’t have to worry about losing your house or belongings. When you don’t owe money, you are in control.

So, commit to eliminating your debts, today. Write it down and post it where you will see it often. Then, tell someone about your commitment. Ask them to make the journey with you, or go find a group of folks that are already working to be debt free and ask if you can join them. Make it public. The more The more people that know about your commitment, the more likely you are to stick with your plan and succeed.

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Step 2: Stop borrowing money

Unfortunately, this may be the hardest step. While there are some purchases where it may make sense to borrow money (your house, because its value may appreciate), in most cases borrowing money is simply trading time for money. So, you should always carefully consider whether you need a purchase now, or whether you can put it off until you actually have the cash in hand.

Unfortunately, this will take discipline. Credit card companies and banks have made it very easy and convenient to borrow money. Fight the urge. Make it more difficult for yourself. Take your credit cards out of your wallet. If you can, cut them up. If you can’t, put them somewhere that you cannot easily get to them. Use cash wherever possible. Even if you plan to pay off your credit cards every month, studies have shown that people are more likely to spend money when they use credit or debit cards.

Please note: I am not advocating getting rid of all your credit cards. In today's on-line environment, there are just some things where it can be safer to use a credit card (on-line purchases, reservations, etc.). While you can use a debit card for many of them, sometimes the stolen card liability limits, are able to provide more protection. In any case, I am advocating vigilance. If at all possible, do not give in to the urge to spend money that isn't already in your checking or savings account.

Need more in-depth help? Click here to see more information about the "Debt-To-Wealth" debt elimination program.

Step 4: Create and Execute your Debt Elimination Plan

This next step focuses mostly on your list of debts. Once you have this list, do the following.

1. For each creditor, list how much you owe them, the minimum payment, and the interest rate.


2. Decide the order in which you wish to pay off the debts and re-write your list in that order.


3. Pay the minimum payment on everything but the first debt on the list.


4. Find a way to pay more than the minimum on the first debt on the list. To do so, you may need to find other expenses you can eliminate. Here is where your list of bills comes in handy. Are there any services you pay for that you aren’t using? Are there any that you can do without? If you cannot find any obvious sources of cash, start looking at your incidental expenses. Consider postponing purchases, canceling subscriptions, clipping coupons, anything to free up additional money to pay off your debts.


5. Once the first debt is paid off, do the same with the second debt in the list, using the money from the first debt on the list to pay off the second debt even faster.


6. Keep repeating using money saved from previously paid off debts to accelerate your current debt’s payments until all your debts are eliminated.

Need more in-depth help? Click here to see more information about the "Debt-To-Wealth" debt elimination program.

Step 3: Make a list of all your bills and debts

In short, list every person and organization to which you make regular payments. Then separate that list into two categories-debts and bills. A bill is a fee for a service. If the service stops, the bill stops. A debt is money that you have borrowed that is expected to be paid back. Debts typically accrue interest. Bills usually do not.

Debts:

• Major Credit Cards – Visa, MasterCard, Discover, etc.


• Store Specific Cards – Gas stations, Department stores, etc.


• Car Loans


• Student Loans


• Home Mortgage


• Home Equity Loans


• Any other type of payment or loan that has interest associated with it

Bills:

• Utilities (electricity, gas, water, sewer, garbage, etc.)


• Phone/Cell phone


• Cable or Satellite


• Internet Access


• Rent (if you do not own your own home)


• Club memberships – Health, social, etc.


• Etc.

Need more in-depth help? Click here to see more information about the "Debt-To-Wealth" debt elimination program.

Is it really that easy to eliminate my debts?

Creating the plan is pretty easy. Putting the plan into action can be very difficult. You may want additional information regarding which debts, if any, are okay to carry. You may need help finding money to make additional payments. You may struggle deciding what order to pay off your debts. Or, you may have a thousand other questions.

Need more in-depth help? Click here to see more information about the "Debt-To-Wealth" debt elimination program.

Can you recommend help?

Three years ago, my wife and I decided to become debt free. We looked at several programs. All of them provided good information, but many were hard to follow. If you are not comfortable setting out on this journey alone, consider purchasing "Debt to Wealth". For slightly more than the cost of a hardcover book, this program provides an amazing amount of support and information. "Debt to Wealth" will help you understand why you are in debt, why you struggle to get out of debt, and what steps will work for you to eliminate your debt. It worked for me and I know it can work for you. Click here for more information