By Robert Singleton

Your Ten Step Debt Elimination System

The simplest systems are generally the best. This adage applies to debt elimination too. Over the years, I have evaluated many systems. Let me introduce you to the best one.
The Simple, yet Effective, Idiot proof, Iron Clad, No Holds Barred, Debt Elimination system, Devoid Of Any Fine Print.
Just take the following steps and your goal of debt elimination will be achieved.

1.) Check the recorded expenses for the last 12 months. One year is a sufficient period for checking personal experience. Check all recorded expenses, bank statements, cancelled checks, credit card statements, or whatever other record you have. For cash expenses, carry a small notebook with you for a few weeks and note down all expenses, however minor it may seem to be. At the end of the day, you will be amazed to see a molehill becoming a mountain. I have gone through this. It is a pain really.

2.) Find out the total monthly expense, by dividing the recorded expenses by 12 and adding the cash expenses adjusted for a month.

3.) Make a list of your debts. Do not forget to include mortgage. Call your creditor if you do not have this information handy. (However, it pays to keep the information handy.)

4.) Make a list of minimum payments on your debts that you have to make every month. Assume that the total comes to $2000 every month.

5.) Find out debt remaining repayment period assuming minimum installment every month.

6.) Rank your debts on the number of months for repayment in ascending order. That means, the debt with the smallest number of months remaining for repayment, is the first number. Go on until the last debt.

8.) In step # 4. you have calculated your minimum repayment as $2000. Make up your mind to increase this by 10%.

9.) To have an additional $200 for repayment, reduce $200 from your expenses, and reserve it for additional debt repayment. Think of all the possible ways to do this. Make a determined effort and most likely you will exceed your target of $200.

10.) Use this additional $200 for repayment of first priority debt. If you were paying $100 previously, now you will be paying $300. This $300 will have a cascading effect on your repayment as soon as the first debt is paid off. You will now have $300 additional for repayment in place of $200 that you had from your savings. This way you will be debt free in a few years. The beauty of this system is that it all came from just $200 that you have saved in years of your resolve to be debt free. When you have paid off the final debt, you will find that you have a much larger amount in hand to spend than your original $200 a month that you saved initially from your expenses.The cascading effect of your saving $200 will be evident in coming years. Not only will you be just debt free in few years, but also will have built a substantial base on which to build up your dreams. All this for just $200 per month of your initial saving efforts.