 |
Simple Debt Reduction Strategy
Here's an easy-to-follow debt reduction plan that can If you've been trying your best to keep family spending under control, but it doesn't seem to be enough... this might help. And, the best part is... it's free! How many credit cards do you pay the minimum payment every month? Four... five... six? More? I bet you've even tried transferring balances and consolidating onto just one card, but before you know it the old cards are being used --- and the limits are getting maxed out all over again. The link below opens up a new browser window so you can take a look at the debt reduction chart while referring back to this page for comments.
Notice the chart refers to a supercharger. This is extra money you commit each month to your debt elimination plan. That's right - extra money. Now, before you freek out... let me clarify. Regardless of your debt load, it's likely you can find some extra cash flow to create your supercharger. Let's begin with the obvious. Your daily spending habits. Start writing down every penny you spend during the day. Coffee at Starbucks ... movies at Blockbusters ... lunches you buy even though you could make them cheaper at home. Do you smoke? Now's a good time to cut back. Contribute to your health and wealth simultaneously. You get the picture. Be tough on yourself. Itemize everything. You'll likely find an extra $30 or more each month. This is your supercharger. Then, there's the less obvious. For instance, are you enrolled in a 401(k) plan at work? Then, put a temporary stop on your contributions. I bet the amount of money you can save on your debt reduction will exceed the amount of money you earn in your 401(k). Don't get me wrong. I'm not telling you to get out of your 401(k) plan. No way. It's a great retirement savings tool. What I'm saying is temporarily move your automatic contributions over to your supercharger. Go back into the 401(k) when you have a better handle on your debt. If your employer matches a portion of your own contribution then don't forfeit this free money by reducing below the employer's minimum matching amount. Take a look at your life insurance policy, if you have one. Is it issued by a mutual life insurance company (eg. New York Life, Northwestern Mutual, Mass Mutual, Guardian, etc.)? There's a possibility annual dividends can reduce your out-of-pocket premium requirement. Here's more money for the supercharger. Shop around for better rates on your auto and home owners insurance. Many times you can get a discount by having the same company insure multiple items. If you don't ask... you don't get. Do you receive an IRS refund each year and then blow it on something you immediately forget about the following year? A recurring refund typically indicates too few exemptions claimed on your employer's W-4. Ask to increase the number and you'll likely have more spendable dollars each payday for the supercharger. If you really are determined, focused and disciplined... finding a supercharger will not be impossible. One major reason this debt reduction program works is because it effectively applies the power of compounding. The monthly payment applied towards your debt ranked number one is simply composed of the minimum requirement plus your supercharger. However, when debt number one is paid off the amount of monthly payment applied to the debt ranked number two will be:
Even if you haven't determined the exact amount of your supercharger just pick a number and complete the debt reduction chart. Go ahead and see for yourself.
|
