thing that got most people into debt in the first place. Hunkering down to become debt-free forever isn’t justabout “feeling good,” it’s about becoming debt-free as fast as possible. Paying off your most expensive debt first is the most efficient way to become debt-free. And when you’re debt-free, you’ll feel great!
Now you’re going to snowball the amount you were paying on the first debt you’ve just vanquished and put it into the payment against the next debt dragon you must face. On our sample list it’s the $1,200 owed on the department store credit card. Add the amount for the minimum payment for that debt ($48) to the amount you were using to repay the previous debt ($250.95), and you’ll have the amount ($48.00 + $250.95 = $298.95) that you’ll be using to pay off the $1,200 department store credit card balance. It’ll take about four months to slay the second debt dragon ($1,200.00 ÷ $298.95 = 4.0 months). As each debt is paid off, you continue to snowball the amount from the debt just paid off by adding it to the minimum payment on the next most expensive debt on your list.
Do I actually have to say that you should not be using your credit for anything at all at this point.
NOTHING!
There is no good reason to spend on credit if you’re trying to get to debt-free. If you’re still using your credit, you’re not really serious about this. If you are serious, you’ve chopped up your cards so you can’t use them, and you’re living within your means.
DON’T PROCRASTINATE!
If you have to wait until your next pay period to get started, or until you know you have some extra money, or until [insertyour pathetic excuse here], you’re procrastinating. How’s that working for ya? Any closer to being debt-free?
If you want to be debt-free you must start TODAY. “But I don’t have the money,” you say. Well, then, either you’ll have to find a way to make more money or use the money you do have in a smarter way. Go over your budget with a paring knife and trim out all the non-essentials that are sucking away your money.
Right now. I mean it. Grab your budget and start trimming your expenses.
How much did you come up with?
Do it again.
Now how much do you have?
Do it again.
And again.
You want your budget to be so tight it squeaks.
GAIL’S TIPS
Swap a bad habit for a good one. Love candy? Can’t walk by the coffee shop without dropping $3 for a caffeine boost? Smoke, drink pop or booze, chew gum? Start giving up your bad habit slowly, and reward yourself with a good one—debt repayment—as you do. Go from smoking 20 cigs a day to 15, and add the money you didn’t send up in smoke to your debt repayment plan. Walk past the coffee shop just once and you can add another $3 to your debt repayment. You’ll beamazed at how satisfying—and addictive—becoming debt-free can be. Once you’ve converted, find an apostle and spread the word!
Add whatever you’ve squeezed out of your budget to the payment on your most expensive debt. If you managed to chop $300 from your expenses, add that $300 to the payment on the first debt on your list.
GAIL’S TIPS
Make a payment whenever you have an extra 10 bucks to dump on your debt. Don’t wait for the due date. If you owe money, it’s always due. The faster you make a payment, the quicker you turn off the interest clock.
Every penny counts. Start carrying a notebook around with you, and whenever you save money on something—because you used a coupon, because you got it on sale, because you decided not to buy whatever it was that was on your list—write it in your notebook. When you get home at night, make a payment of however much you’ve saved that day against the debt that’s at the top of your list. (This assumes you don’t end up getting dinged for bank charges on every payment. If you have a transaction limit, save it all up and do it once at theend of the month.) Now you’ve put what you saved to good use, as opposed to leaving
Now you’re going to snowball the amount you were paying on the first debt you’ve just vanquished and put it into the payment against the next debt dragon you must face. On our sample list it’s the $1,200 owed on the department store credit card. Add the amount for the minimum payment for that debt ($48) to the amount you were using to repay the previous debt ($250.95), and you’ll have the amount ($48.00 + $250.95 = $298.95) that you’ll be using to pay off the $1,200 department store credit card balance. It’ll take about four months to slay the second debt dragon ($1,200.00 ÷ $298.95 = 4.0 months). As each debt is paid off, you continue to snowball the amount from the debt just paid off by adding it to the minimum payment on the next most expensive debt on your list.
Do I actually have to say that you should not be using your credit for anything at all at this point.
NOTHING!
There is no good reason to spend on credit if you’re trying to get to debt-free. If you’re still using your credit, you’re not really serious about this. If you are serious, you’ve chopped up your cards so you can’t use them, and you’re living within your means.
DON’T PROCRASTINATE!
If you have to wait until your next pay period to get started, or until you know you have some extra money, or until [insertyour pathetic excuse here], you’re procrastinating. How’s that working for ya? Any closer to being debt-free?
If you want to be debt-free you must start TODAY. “But I don’t have the money,” you say. Well, then, either you’ll have to find a way to make more money or use the money you do have in a smarter way. Go over your budget with a paring knife and trim out all the non-essentials that are sucking away your money.
Right now. I mean it. Grab your budget and start trimming your expenses.
How much did you come up with?
Do it again.
Now how much do you have?
Do it again.
And again.
You want your budget to be so tight it squeaks.
GAIL’S TIPS
Swap a bad habit for a good one. Love candy? Can’t walk by the coffee shop without dropping $3 for a caffeine boost? Smoke, drink pop or booze, chew gum? Start giving up your bad habit slowly, and reward yourself with a good one—debt repayment—as you do. Go from smoking 20 cigs a day to 15, and add the money you didn’t send up in smoke to your debt repayment plan. Walk past the coffee shop just once and you can add another $3 to your debt repayment. You’ll beamazed at how satisfying—and addictive—becoming debt-free can be. Once you’ve converted, find an apostle and spread the word!
Add whatever you’ve squeezed out of your budget to the payment on your most expensive debt. If you managed to chop $300 from your expenses, add that $300 to the payment on the first debt on your list.
GAIL’S TIPS
Make a payment whenever you have an extra 10 bucks to dump on your debt. Don’t wait for the due date. If you owe money, it’s always due. The faster you make a payment, the quicker you turn off the interest clock.
Every penny counts. Start carrying a notebook around with you, and whenever you save money on something—because you used a coupon, because you got it on sale, because you decided not to buy whatever it was that was on your list—write it in your notebook. When you get home at night, make a payment of however much you’ve saved that day against the debt that’s at the top of your list. (This assumes you don’t end up getting dinged for bank charges on every payment. If you have a transaction limit, save it all up and do it once at theend of the month.) Now you’ve put what you saved to good use, as opposed to leaving
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