How To Get Out of Debt With A Debt Repayment Plan
We’ve often talked about how to get rid of debt. But this time, we’d like to cover an actionable plan comprised of simple steps you can perform to fully eliminate your debt.
While some families I know can pay off their credit cards each month, most people I know maintain mortgages, car loans, credit card and other debt. In the past, I felt like I was climbing a mountain that I’d never pay off, but I learned how to set up a debt repayment plan. The process isn’t too complicated to set up and with consistency, I found out that I could find zero balances at the end of my hike.
How To Get Out of Debt: Set Up A Debt Repayment PlanAllow me to go through what I’ve done to set up my personal debt reduction program.
1. List your debts.First off, I took all my latest billing statements and listed all my debts. If spreadsheets aren’t your thing, just start with the nearest sheet of blank paper and start writing down items like:
credit cards auto loans student loans personal loans medical bills 2. Add up your debts.Next, I added the amounts I owed and the interest rate for each debt. For example, let’s say I owed the following:
Debt Name Amount Owed Interest Rate Visa Credit Card $15,000.00 18% MasterCard Credit Card $3,600.00 15% Car Loan $8,800.00 5% Student Loan $13,000.00 6%While a grand total of $40,400 might make anyone woozy, I’m sticking with the program and focusing on the amount I want to repay each month. I then asked a debt calculator how long it would take to pay off my Visa if I paid only the credit card minimum payment due each month. When the calculator came back with an answer of 32 years, I decided I needed to pay more.
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