We posted this last year, and it's good to update and repost for 2012! It's that time of year to start paying off all your holiday shopping bills, and as those dreaded credit card statements arrive this month, take a deep breath, open the letters, and start creating a budget to pay off the balances.
Six Steps To Pay Off Debt:
Debt Relief Step 1: -- Analyze your current debt: loans, credit card bills, monthly obligations. Determine the maximum you can apply to your bills. For instance, you cut your monthly expenses to the bone and find $500 a month to clear your debts.
Debt Relief Step 2: -- Now, total all credit cards and bills you want to eliminate. Look at the minimum payment due for each one, then add 20%. So if the minimum payment is $50, the monthly payment you'll make from now on will be $60. Total all these bills for Step #3....
Debt Relief Step 3: -- You've set aside $500 a month to clear these debts you've identified. The total from Step #2 is $250. Subtract this amount from the $500. You now have $250 extra money to pay off holiday debts. This $250 knocks out debt fast.
Debt Relief Step 4: -- Keep paying all your bills on time with the additional 20% added to each. But, most importantly, apply the extra $250 on the credit card bill which has the largest total balance on your list, ON TOP OF your regular monthly payment. Not instead of, IN ADDITION TO your regular payment! This is important to eliminate this debt as quick as possible.
Debt Relief Step 5: -- Stop making more debt! Take your credit cards out of your wallet and lock them away where you won't use them anymore while you're busy eliminating debt (some say to cut them up, but let's keep the credit cards in case you need them for an emergency).
Debt Relief Step 6: -- When your largest debt has been paid off completely, apply its respective monthly payment and that extra $150 you've used to pay it down, and apply ALL OF THAT MONEY to the next-largest debt. Same thing: make the regular monthly payment, plus 20%, plus the monthly payment you were making on the paid-off credit card, PLUS the extra $250 you were using to pay it off, and pay this entire amount on that 2nd highest debt, until it is paid off too, and then repeat the process on the 3rd highest debt. This debt reduction plan will start to accelerate once you've finally got a large portion of that $500 going to only one or two monthly bills.
We've published a free step-by-step debt relief plan at Pay-Off-Debts.com to help you get rid of debt worries for good!
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