Paying Off Debt 101

What is the simplest way to pay off my debt?

This is a common question most people ask a financial adviser, banker or themselves.

Unfortunately and fortunately there a number of simple ways to pay off your debt. The reason I say unfortunately and fortunately is that it gives everyone hope. Because if there were only one way and you just never could do that one way you would always be in debt.

Simple way #1 is to consolidate all your bills into one payment. Usually you would save some money. Then at that point you should continue to make the same payment.

For example let’s say before the consolidation loan you were paying $900 on all your bills. After the loan your new payment would be $700. The simplest thing to do is to continue to pay $900 on the new loan. This way you will be accelerating the pay off of you bills.

Another reason a bill consolidation loan in good is that usually you are lowering your overall interest rate since some bills will be higher and some lower than your new interest rate.

Simple way #2 is to start paying extra on one bill. This is commonly called Debt Stacking. With simple way #2 you continue to make minimum on all your bills except one. Take all the additional money you are paying on other bills or what you can afford and pay that on one bill. Usually this extra money should go on the lowest balance, not the highest bill or the highest interest rate.

What we are attempting to do with a debt stacking plan is to free up more money the fastest or quickest way possible. This is not accomplished by paying on the highest balance since most likely it would take years to pay off instead on months on a smaller balance.

That’s all for now. Check back again for additional simple ideas to pay off your debt.

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Your Magic Wand for Debt Elimination

What if you could wave a magic wand and all your debt is gone? Wouldn’t that be nice? A little wave, maybe a couple words and all your debt is gone. What type of vacations could you now afford if you had zero debt? Would you be able to send your kids to a better school or college?

It is important to take a look at what credit card debt is NOT allowing you to do. If you had an extra $500 a month would this help with your lifestyle or retire earlier? Let’s take a look at a plan that could save you a lot of money: The Debt Stacking Magic Wand

There is one magic wand and that would be to form a debt plan. Now if you did have a magic wand that’s probably what it would produce. BAM. A debt freedom plan that would show you step by step how to elminate debt quickly and effectively.

One of the best plans is a debt stacking plan. All you do is attack one bill at a time. It could be a department store card, a Visa or MasterCard or a car loan. Whatever bill you look to payoff first the most important part is to only pay the minimum on the rest of the bills.

Usually the best bill to attack first is the one with the lowest balance since it can free up more money quicker than higher balances. Some people think paying off the highest balance makes the most sense since they are paying the most interest on that bill. However, usually the smaller balances will have a longer pay off period than some larger balances.

I know this doesn’t seem logical, but trust me it works. A true debt stacking plan would involve paying more than the minimum on one bill. Hopefully you can pay more than $100 a month towards a plan. Keep paying the $100 extra on that first bill until it is paid off. Then take the $100 plus the minimum on that bill you were paying, say it was $40.

On the next bill you would take the entire $140 plus its’ minimum payment, say $55 . On this bill you would pay a total of $195 until that balance is elminated. Keep doing the same with the rest of the bills.

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The Two Choices We Face by Jim Rohn

Each of us has two distinct choices to make about what we will do with our lives. The first choice we can make is to be less than we have the capacity to be. To earn less. To have less. To read less and think less. To try less and discipline ourselves less. These are the choices that lead to an empty life. These are the choices that, once made, lead to a life of constant apprehension instead of a life of wondrous anticipation.

And the second choice? To do it all! To become all that we can possibly be. To read every book that we possibly can. To earn as much as we possibly can. To give and share as much as we possibly can. To strive and produce and accomplish as much as we possibly can. All of us have the choice.

To do or not to do. To be or not to be. To be all or to be less or to be nothing at all.

Like the tree, it would be a worthy challenge for us all to stretch upward and outward to the full measure of our capabilities. Why not do all that we can, every moment that we can, the best that we can, for as long as we can?

Our ultimate life objective should be to create as much as our talent and ability and desire will permit. To settle for doing less than we could do is to fail in this worthiest of undertakings.

Results are the best measurement of human progress. Not conversation. Not explanation. Not justification. Results! And if our results are less than our potential suggests that they should be, then we must strive to become more today than we were the day before. The greatest rewards are always reserved for those who bring great value to themselves and the world around them as a result of who and what they have become.

To Your Success,
Jim Rohn

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