Article Summary:Guidelines for getting out of debt.
If you are in debt, I strongly encourage you to follow my five-step debt elimination process. Although many processes exist, my approach allows you to live in abundance while you eliminate your bad, consumer debt.
A. The name of the creditors
B. How much you owe
C. Your minimum monthly payments
D. The interest percentage rate and the factoring number - which is your total amount of debt divided by the minimum monthly payment required.
Divide the "Total Amount" of the debt by the "Minimum Payment" of each bad debt to find the factoring number for each account.
Review all the consumer debt and create a priority order of payoff list. Your debt with the lowest factoring number will be your first payoff priority. In other words, pay off the creditor with the lowest factoring number first.
Allocate at least $200 that you currently spend to pay off your debt. It will jump-start the debt elimination process and go a long way in getting you out of debt. At this time, $200 may not seem like much, but you'll be amazed at how it will work!
Take the debt listed first on your priority order of payoff list and apply
the $200 we suggested that you allocate in Step 4 to the minimum payment for
this debt. For instance, if your minimum payment is $350 and you add $200 every month, pay $550 on that debt until it's fully paid. In addition, continue making minimum payments on each of your other bad debts on the list.
When you finish paying off the number one priority debt, pay the amount you paid on that debt (number one priority debt) and add that amount to the minimum monthly payment for the number two priority debt and so on until you totally eliminate all of your bad debt. Taking our example in the paragraph above, the monthly minimum was $350 and the additional amount was $200. So add that $550 to the minimum required on that account, say $100, and pay a total of $650.
Be especially clear on the amount of money you allocate to your debt elimination plan in addition to your minimum monthly payments.
Write a statement don't cheat!
Committing yourself to your debt elimination plan. Promise to eliminate your
debt and state the reasons why you've decided to do so. At times, you'll be tempted to use your credit cards or assume some additional debt. When they arise, remember your commitment and reread your statement to remind yourself and support your wobbly resolve.
Loral Langemeier, founder of Live Out Loud, is known as the millionaire maker. A team made multi-millionaire by age 35 she actively invests in business, the market, multiple real estate ventures and more. Through her diverse experience, she developed the concept of a Financial Wealth Cycle which is the core of her coaching programs. President of several companies, Loral is a nationally known speaker, coach and author of the book, Guerrilla Wealth, part of the best selling Jay Conrad Levinson Guerrilla Marketing series. For more information, visit www.liveoutloud.com