In August of 2006 I posted Practical Ways To Become Debt Free Forever. Today, I thought I would re-post the article, with a few minor updates.
1. If you have Credit Cards with Outstanding Balances.
A. Cut up ALL Your Credit Cards, and do NOT open new lines of credit.
B. Call those cards and ask them to reduce the interest rates.
2. Save or Earn an Extra $150 - $200 Per Month.
3. Pay this Extra Money off ONE Credit Card each Month until it is Paid Off.
A. Do NOT open new lines of Credit, as the idea is to get OUT of debt, not deeper into it.
4. Continue to Pay the Minimum of ALL your other Credit Cards each Month.
5. Once One Card is paid Off Apply the TOTAL amount to a Second Card.
6. Continue until All Your Credit Cards are Paid Off.
7. Apply the Same Method to your Car and House Loans.
8. Do Not Borrow Money for Consumer Goods Ever Again.
9. Use this Monthly Amount to Build Your Assets (aka Savings).
Using this Simple Method, as John Cummuta says, most People can become Debt Free in 5 to 7 Years and Wealthy in 10 to 15 Years. Please note Dave Ramsey say, that you will be more successful if you build an emergency savings of $1,000 ($500 if you make less than $20,000/year) first, and then pay off you smallest debt first. According to Ramsey, it may be mathematically correct to pay off the highest interest rate first, but if we were think mathematically, we would never have gotten ourselves into debt in the first place.
4 comments:
I think it's not the issue of mathematical thinking but of changing our ingrained and absurd conviction that you can get all now and pay for it later. That's what credit cards promis you. But debt is always the price for it in the long run.
So overall you can be pretty comfortable in 15 years or so.
I think when you give people a reason to get out of debt i.e. being wealthy it motivates them.
I agree with cc aid also.
I tell you what has motivated me and that is not be a SLAVE to the LENDER anymore.
We are currently getting debt free and are loving it....
I just sold my home and my truck, and bought a $3900 paid cash for car. I have a picture of it on my blog on my site. I agree 100% about having NO credit cards.
My Debt Free Page
It's interesting how things change in less than a year. Just shows that you have to keep up to date with the financial world or you, and your methods can quite easily get out of date!
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