Follow along with me, one step at a time.
Where does it all go!
Sounds familiar?
Well, it does to me.
I've had it. It’s time for me to take control of my money instead of my money controlling me!
This time, I am determined. I was recently introduced to a system that if followed, promises to bring you peace and tranquility knowing that your bills will be paid and that you will even have some money in the bank. The steps are divided into sections and topics, to help simplify the process.
You are on Part 4 of the Taking Charge of Your Money Series
read more...
I am presently on this step. I am working on pay off all of my debt. I have filed bankruptcy in the past due to a job lost and I started to notice a pattern with my spending starting again.
Until I was introduce to these easy steps will help me eliminate my debt and
Take Charge of Your Money
It will take me about 2 years to completely pay off my debt because of my low income however I am thinking out of the box and getting creative in able to achieve my goal and live debt free.I am determined to learn to control money and not have it control me.
I have had great support and encouragement from my family, friends and readers.
Ways to generate more income will be shared soon...
Let's Begin...
Section 4 of Taking Charge of Your Money Series, Tackling the Unsecured Debt
I recommend, taking one step at a time and fully understand the concept and enjoy knowing the you are working towards Taking Charge of Your Money. I welcome and encourage comments so that we could help each other made Living Life on 1 Income as a Single easier.
This is not punishment even though it might feel like it is at time but freedom.
We will now work on tackling all of our debt except the mortgage.
Depending on the amount of debt that is owed and the income coming in, this step might take the longest to accomplish. Keep in Mind, we aren't to get into any more debt. If you are following along with the steps we should not be using credit what so ever. We are using and implementing our budget and we are current with all of our normal month expenses like: light, gas, cell phone, water bill, car note. And in step 3 we started building our mini emergency fund
Now Let's Tackle Our Debt
On a blank piece of paper or on a computer spreadsheet, jot down ...
All debt except the mortgage.
- Credit Cards debt,
- Student Loans,
- Loan from a Family members or Friends
- Doctor Bill.
- Etc
For Example :
DEBT MINIMUM REQUIRE PYMT
Credit Card 1- $1874 $75
Gas Card- $625 $15
Credit Cards 2 $1254 $50
Doctor Bill- $425 $15
Car Note $16,500 $250
Owe Brother $625 0
The next step might be a little strange to some however by doing it you will find that you are achieving and getting things paid off. Rearrange you list from the smallest debt to largest.
YES, smallest to largest.
By paying off the smallest debt first we'll get a sense of achievement and it will actually motivate us to keep going until all of our debt is paid off.
After the debt is rearrange either in writing of a spreadsheet computerized format,we will start paying debt off. Once again, smallest one first!
DEBT MINIMUM REQUIRE PYMT
Doctor Bill- $425 $15
Gas Card- $625 $15
Owe Brother $625 $25
Credit Cards 2 $1254 $50
Credit Card 1- $1874 $75
Car Note $16,500 $250
Now, tally up what will be needed monthly to stay current.
The way we will do this is by:
Adding the budgeted amount for your monthly & periodical expense from: Step 1 of the series
then we'll add the total amount of out minimum payment from our debt( this current step)
Example:
Monthly Expenses + Periodic Expenses + Debt's Monthly minimum = Need a Month to stay current.
Now, what is your monthly take home pay after taxes? Let's find out if it balances.
Need a Month to stay current- Net monthly Income = left over
Is there anything money left over after deducting was is going to be needed to stay current?
If there is, an left over will go toward paying down the debt.
If there isn't enough money and it did not balance, it is time to get creative.
What expense can you cut?
What can you do to bring in extra income?
Any extra other money that will go towards your 1st debt until the debt is paid off.
Example
DEBT MINIMUM REQUIRE PYMT
Doctor Bill- $425 $15 add $90 pick up babysitting
Gas Card- $625 $15
Owe Brother $625 $25
Credit Cards 2 $1254 $50
Credit Card 1- $1874 $75
Car Note $16,500 $250
Now this is where you will see the debt dwindle and progress made.
Remember
YOU CANT GET INTO MORE DEBT
or
You will be defeating what you are working so hard to accomplish.
That's: Take Charge of Your Money
Using my example.
I will add the $90 babysitting income and any other extra money that comes in and use towards paying off my 1st smallest debt, until that debt is paid off.
When we finish paying off the first debt, then we will work on paying off the second debt
I will then be adding the $105 to the minimum gas payment $15+$105= $120 until the second smallest debt is paid off. When that debt is paid off I will take $120 and add it to my third small expense. I will repeat this until....
I am Debt free accept for my mortgage!
You did not get in debt over night however it is the most rewarding knowing that you do not owe no one money.
Stay motivated by following my Blog, Reading motivations books and do anything that will help you stay debt free and Take Charge of Your Money
Next Step is: Building Your Full Emergency Fund
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