Debt Elimination Can Be Easy - Focus Is the Key!

My wife and I were both working good jobs in corporate America. After going through countless downsizing exercises, layoffs, restructures, etc., we came to the conclusion we were "renting our lifestyles". We had fallen prey to the trap that is being laid for every one of us each and every day. You know the ads, "Only $19.99 per month" or "No payments until June 2009". Every time you put yourself on another payment plan, you are literally adding another syphon hose into your bank account. We found ourselves with too many syphon hoses sucking the life out of our bank account. Each and every month, we were working just to pay these small payments. Every time we made a buying decision, we found ourselves conditioned to ask, "Can we afford the additional $20/month", instead of looking at the long-term effects those payments would have on our retirement and ultimate wealth.

It's this mentality that we all have to fight in our lives. If you don't, you will end up where we did...we found ourselves in a place that if we lost our jobs we would be in a world of hurt. Those payments were okay until/and unless we lost our jobs. The creditors would still want their money no matter what our employment situation!

That's when we realized what was causing the most stress in our lives! It wasn't that we didn't make enough money...it was that we were spending our days to pay all these creditors and making them rich. The balances never seemed to drop and we felt trapped! Ever feel that way? That's when we decided to eliminate debt from our lives. We actually developed a "hate" for bad debt (I'll write my opinions on good debt and bad debt another time). It was a transformation in our thought process and resulted in a dramatic change in our lives.

Fast forward 3 years later and we have successfully paid off all our debt. I can tell you the stress in our house is so much less than it ever was under the debt load. Every time we paid another debt off, we could literally feel the relief! If was like a huge weight was lifted!

We followed a very simple approach. I stuck all my debts in a spreadsheet. I tried to figure out which debts would pay off the quickest, so I divided the outstanding debt balance by the MINIMUM monthly payment required per the agreement. Then, I sorted these from lowest to highest to determine which one to focus on first. I wanted to add a small amount extra on that first debt, while continuing to make the MINIMUM monthly payments on all the others.

I did a budget and figured out how much money I could dedicate to paying towards the debt with the lowest result above. This amount was on top of the MINIMUM monthly payment. Once that debt was paid off, I would use the extra amount I originally agreed to pay towards the first debt, the MINIMUM monthly payment from the first debt(which is paid off now) and the MINIMUM monthly payment from the second debt to pay towards the second debt balance. This process continues until all my debts are paid off! You can see how quickly this process can work. I'm no genius, but this process made sense to me and it worked fast!!! Let me know if you have questions about it. Putting it down on paper makes it real and gives you a timeline of when it will actually happen. It is a very exciting process!

Once you get all your debt paid, you can start to give more and more to your church, community, family and just those around you in need.

So, what if you "don't" have any extra money to put towards your debt. I could write a list a mile long, but I'll just share a few of them below. If you absolutely find that you don't have extra income to apply to your debts, you may need to consider an extra job for a short time.

- Drink less soda each day
- Smoke less or quit
- Minimize gift giving, just through this process
- Eat at home, instead of eating out
- Take your lunch, instead of eating out
- Raise your insurance deductables
- Cut your cable bill, just through this process
- Cut your cell phone, just through this process

I could go on and on, but you get the picture. At first glance, you may think these seem like hardships. However, as your debt evaporates, you will not believe the sense of freedom and excitement that overcomes you! If you are serious about eliminating your debt...focus is the key. Most people, using this method or something similar, can pay off all their debt in 5-7 years (including their house).

I hope you found this quick blog helpful. Please post your comments and questions.

Cameron Long
http://www.passionforgreatness.com/