How to Eliminate $682 Per Month in Debt

How to Eliminate 2 Per Month in Debt

We are going to go through this step-by-step with a hypothetical scenario. Joe Smith will be our hypothetical debt-ridden participant. We will show Joe step-bystep how to eliminate his debt so just imagine you are in Joe’s shoes and applythe same techniques.

Joe’s efficient budgeting has saved him an extra per month. He has these debts at these monthly payments:

Debt 1 – 0 @ per month

Debt 2 – ,200 @ 0 per month

Debt 3 – ,300 @ 2 per month

Debt 4 – ,000 @ 0 per month

STEP 1

Joe will pay the minimum balances on all his debts except the smallest (Debt 1).He will use all of his extra money ( per month) to payoff his smallest debt first(regardless of interest rates). Thus, Joe will be paying 0 per month on Debt 1( original payment + additional from budgeting). Joe will continue payingthe minimum payments on Debts 2, 3 and 4.

• This technique is recommended because Joe can quickly payoff thesmallest debt of 0. Once he does, Joe will feel GREAT because hehas accomplished his first step to debt freedom. This will give Joe theconfidence and drive to continue paying off all his debt.

• Though not recommended, Joe may be disciplined enough to take on alarger debt balance first which carries a larger interest rate. Joe could goahead and do this, but he needs to be careful not to become discouragedand quit.

• If Joe had two debts with similar balances, then he should pay off the onewith the highest interest rate first.

STEP 2

Joe has paid off Debt 1. He should now use the monthly amount he was payingon Debt 1 and begin eliminating Debt 2 of ,200 (which is actually lowerbecause he has continued paying the minimum payment). Here’s how it works:

• Joe will apply extra from budgeting, plus from Debt 1, plus theminimum payment of 0 for Debt 2.

• Joe will be paying a total of 0 per month on Debt 2 until it is paid in full.

• He will continue paying the minimum payments on Debts 3 and 4.

STEP 3

Joe has paid off Debt 2. He should now use the monthly amount he was payingon Debts 1 and 2 and begin eliminating Debt 3 of ,300 (which is actually lowerbecause he has continued paying the minimum payment). Here’s how it works:

• Joe will apply extra from budgeting, plus from Debt 1, plus 0from Debt 2, plus the minimum payment of 2 for Debt 3.

• Joe will be paying a total of 2 per month on Debt 3 until it is paid in full.

• Joe will continue paying the minimum payment on Debt 4.

STEP 4

Joe has paid off Debt 3. He should now use the monthly amount he was payingon Debts 1, 2 and 3 to begin eliminating Debt 4 of ,000 (which is now lowerbecause he has continued paying the minimum payment). Here’s how it works:

• Joe will apply extra from budgeting, plus from Debt 1, plus 0from Debt 2, plus 2 from Debt 3, plus the minimum payment of 0for Debt 4.

• Joe will be paying a total of 2 per month on Debt 4 until it is paid in full.

STEP 5

JOE IS DEBT FREE! He has paid off ,300 in debt and now has an extra2 per month including:

• effective budgeting

• Debt 1

• 0 Debt 2

• 2 Debt 3

• 0 Debt 4

So what should Joe do with the extra 2 per month, blow it? No way. Now itis time for Joe to become a millionaire. Visit PeskyDebt dot net to learn how to turn the extra 2 per month into ,594,263.39 over time.

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