. Financial Freedom
Financial distress is such a burden in our lives. Sometimes it is consumer debt, habitually it involves vehicle debt, and frequently it includes a heavy mortgage. It is not a lifestyle any of us would choose, but one which we are often caught in. Somehow the black hole of debt looms bigger and bigger in our lives until it becomes so deep and is so overwhelming we decide to just give up and hope things “will work out”.
May I suggest another way? Debt doesn’t have to be forever. It doesn’t have to rob you of precious pennies, valuable dollars, and a good night’s sleep. It just doesn’t. You can begin today to turn the corner, change your circumstances, and find answers to this need. The process is easy to begin. It is worth every sacrifice it will bring to your life. If you desire to start, you can download the “Debt Elimination” form for your use.
1) Detail on this form to whom you owe money, usually listing from left to right the smallest debt to the largest debt.
2) List how much do you currently owe to each of these creditors.
3) For consumer debt, vehicle loans, and home mortgages, calculate how much of each month’s payment is going towards interest and how much is going towards principal reduction. This can be accomplished by using an amortization calculator on the internet or obtaining an amortization schedule from your financial institution. This information alone will help you realize how much can be saved by getting out of debt.
4) Decide today to stop using credit cards. This will be facilitated by putting away a substantial bit of money for any upcoming emergencies in a new “Emergencies” savings account at your local bank. Begin putting extra dollars into it. When there is approximately $1,000 stashed, you are ready to begin reducing your debt and your credit cards will no longer be needed. (Continuing to use a debit card is all right because that is like paying cash.)
5) Begin with the smallest debt and work towards its demise. You might make up a visual reminder, using graph paper and drawing squares to represent the amount left to pay off. A labeled glass jar is also helpful for collecting cash you choose not to spend in favor of paying off this debt.
6) Continue to pay regular monthly payments on all other debts even as you strive to completely eliminate this smallest debt. Plan to “snowball” this debt’s monthly payment towards your next smallest debt when this debt it gone (as shown in the example on the “Debt Elimination” form).
7) Use the “Debt Elimination” form to focus your energies and keep you on track. Let’s begin your trek to financial freedom. No matter your circumstances, no matter the amount of debt, it is needful to know the truth about your obligations and begin to pay them off!
If you have addition questions, please feel free to contact me as I will gladly help you get started towards financial freedom and keep you going until you get there!
Find more helpful ideas in my House of Order Handbook.
Photo from sxc.hu. Used with permission.