What debt elimination strategy do you have to get yourself debt free within the coming years?
What do you think about when you talk about debt elimination strategy? Do you think of paying the minimum amount on all your debts? This is the common thinking among many, but this way does not work. If you pay the minimum amount on all your debts, you will be paying them off for years and years to come. There is a much smarter debt elimination strategy that will get your debts paid quickly.
Your debt elimination strategy is going to be more of a debt payment strategy. This strategy is called the debt snowball. I have used this method very successfully and have seen many more use it as well and get out of debt in record time.
You will begin your debt elimination strategy by doing a budget, determine how much you owe on each credit card, car loans, and student loans. We are not going to apply your home mortgage to this strategy.
The next thing you need to do is take the debt balances and put them in order of largest to smallest balance owed. In order for this debt elimination strategy to work, you will attack the smallest balance with a vengeance. Put as much as your budget will allow toward that debt while making the minimum payment to the larger debts.
Another word of advice, in order for this to work, you need to cut your spending for anything that is not necessary for basic living. If you are serious about paying off debt, you will need to replace your lunch outings with home-made lunches. Instead of checking out the sales at the mall, work on putting that money you would have spent toward your debt snowball.
Also, all the money you were putting toward the other debts, will also go toward this smallest debt, as you will only be making the minimum payments on the other debts.
Once you have the smallest debt paid, you will feel some great relief and actually see this debt elimination strategy works. Now you will take all the money used to put toward the smallest debt and start attacking the next one. You will see how this actually snowballs into larger payments paying each debt off faster and faster. Once you get the largest and last debt, you will have all the money you were putting toward the other payments and apply it all to this giant debt.
You will be able to get out of debt at a much faster rate than sticking with your old methods. Remember, this is not looking at the debts with the highest interest rates, this is looking at debt balance. There is a mindset that will be created when you are able to pay off these smaller debts then putting all your efforts into the larger ones.
You will need to live on the basics, cheap dinner at home, wearing the clothing you already have, selling the expensive vehicles for a cheaper model if necessary. Debt is not worth it! The feeling of being debt free is worth anything you can give up…it is literally life changing. Use this debt elimination strategy