Thursday, September 25, 2008

How To Get Started Eliminating My Debt

I'd like to take a little time away from the Broadway Play issue to revisit the Eliminating My Debt issue. I've been wondering what I could do to eliminate my debt as quickly as possible since I only have around $1500 in debt. Heck, many people have $30,000 or more. I'm dang near rich as far as I can tell. Okay maybe not.

Anyway, this is what I have so far as far as some kind of checklist.
  1. Get my credit report
  2. Create a budget (#41 in the list)
  3. Make arrangements with the creditors in my credit reports for repayment.
  4. Begin paying the most expensive first.
That's about all I have now. I'm wondering if there's anything else I can try. You guys have any ideas? To me it feels like with the right kind of strategy I can get this small amount of debt taken care of in as little as 30-60 days. It's less than two grand for cryin' out loud.

1 comment:

cltgrace said...

Thanks for your thoughtful comments. I'm smiling. :o)

My blog looks a bit different during Ramadan. My personal posts are not as frequent as I focus on prayer for others.

Your progress in debt reduction is great news & a great feeling for sure. My pastor did a finanial series last year providing some very practical strategies for paying down/paying off your debt. Since you've asked for ideas - I'll share what helped me. It's the snowball effect to reducing your debt.

Start with your smallest bill. While paying the minimum amount on
each of your balances, choose the smallest debt & add as much as you possibly can to your payments. Perhaps you owe $300 to Best Buy with a min payment of $30 each month. Find an extra 20-30 bucks somewhere each month - ebay sales, selling old textbooks, skipping your morning chai latte, eat in instead of out - whatever. Find the extra money somewhere & put it on that debt. Pay it off. Celebrate.

Now take that $50 (30 + 20) & add it to the payment of what is now the smallest debt. Say its $500 to the Harley Davison store for those chrome parts- whatever. Minimum payment of $80 you've been paying but you can add $50 to that until it's paid off. Party party! Just kidding - you're getting out of debt, remember? :o)

Now you have $130 to add to your payment for the remaining smallest debt. And so on & so on! It's the snowball effect wiping out your debt.

What do you think? It really worked for me. Experiencing success early gave me momentum (and dollars) to paying off my creditors.

So nice to meet you. Peek in on us at GraceFULL Days from time to time. We always enjoy visitors~

Have a great day & weekend!