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Reduce debt with debt elimination or a bill consolidation program
A debt elimination program can knock off over 7 years from your
debt. However, following a strict debt elimination program takes
a lot of discipline. You have to very committed to the debt elimination
program in order to make it work. You can also join a bill consolidation
program to help you reduce debt. A bill consolidation program can
help you reduce debt by managing accounts for you. You are accountable
to the bill consolidation service and not your own debt elimination
program.
Below we outline a debt elimination program from you. But first,
we should let you know you can also get free
debt consolidation help and talk to a counselor to help you
reduce your debt. You may want to join a bill consolidation program.
All of these options are available for you. You should know that
there is a way to debt elimination, whether it is through your own
debt elimination program or by joining a bill consolidation program.
Debt Elimination Tips
Let's get down to the heart of it. Following the procedure below,
the average American consumer can eliminate all debt including the
mortgage in about 7.5 years using only the money currently earned.
But this is not a half way measure. You must either be committed
to debt elimination to do it or go on to another program that will
reduce your debt. This debt elimination program is drastic, but
so are the results. You are about to find out how badly you want
out of debt, because this debt elimination program is where the
rubber hits the road.
Preparation For Debt
Elimination
- Gather your last six to seven months of check registers. List
each item which has any hope of reduction (not bills because they
will soon be paid off, taxes because they are a fact of life,
etc.). If there is a question, list it.
- Categorize each entry (groceries, entertainment, lunches, savings,
etc.)
- Develop ideas for how to save on each entry aiming for a total
of 10% of gross. (as an example--- stop monthly savings = $50;
use grocery coupons = $60). This becomes your nest egg or "Accelerator
Margin".
Execution Of Debt Elimination
Plan
- List each bill along with payoff amount and minimum payment
required.
- Divide the total payoff amount by the minimum monthly payment
and assign a numeric sequence starting with 1 for the lowest division
answer, 2 for the next lowest, etc.
- Each month make the normal monthly payment to each debt except
debt one to which you also apply the Accelerator Margin. Repeat
until debt one is paid.
- Pay the minimum monthly on all bills except debt two. With debt
two, apply the minimum monthly + Accelerator Margin + former debt
one payment. Continue until debt two is paid.
- Start on debt three with the accelerator margin + former debt
one + former debt two, etc.
Frequently Asked Debt
Elimination Questions
- Shouldn't I payoff the highest interest debt first? No you
should not. The objective is to pay off the quickest ending debt
first in order to create more leverage to pay more on the following
bills.
- What if I have an emergency? ...... if an emergency comes, suspend
your debt elimination progam temporarily, then resume when it
has ended. But make a commitment to get back to your debt elimination
program as rapidly as possible without fail.
- Should I use the money from my 401(K) to create my Accelerator
margin? No! The tax burden far outweighs the gain in debt payoff.
You can temporarily suspend payment to a 401(k) until you have
a few debts paid off but especially in the case of a company subsidized
program, do not stop your matching share.
- This is so easy, how come they don't teach it in school? ......
They don't teach it in school because it is not in the creditor's
best interest and our society is geared toward having greater
debt to stimulate the economy. What is wrong with that picture?
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