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Debt Stacking - Fast Track Out of Debt
You go to the mail box and scan - a
couple fliers (nah), your magazine subscription (yes!)
and bills (groan). Every month the bills show up and
as you sigh and take out your check book you wonder
if you will ever be free.
Each month you pay the minimums and
although you KNOW you've got a handle on it - you are
not charging your credit card or accumulating new debts
anymore - it seems that you will be paying the minimum
fees forever.
Did you know that HOW you pay your debts
can affect how soon you will finishing paying them off
- even if you keep paying the same amount for debt every
month? Of course you might be able to get a consolidation
loan, but if you're not eligible or are not interested
then there are several other things you can do.
It's not always the easiest to figure
out the mathematics, but there are three steps to quicker
debt relief - guaranteed.
STEP ONE - Create a list.
List your smallest debts first followed
by your largest high-interest debts (credit card) and
then your largest low-interest debts (Lines of credit
and taxes).
Plan to pay the minimums on all debts
with these goals in mind:
STEP TWO - Small bills first.
They may not be the highest interest,
but every bill that you are paying some interest on
means you are usually only paying minimal amounts on
the principal. Multiple debts are also a sure way to
bring your spirits down. Paying off small debts first
is a quick way to start checking them off - and freeing
your mind.
STEP THREE - Move the payments along.
When one debt is paid add the funds
to the next debt. For example, say you're making $75
payments to a small debt. When the debt is cleared add
the $75 to the next debt on your list. If the next debt
had a minimum payment of $100, you will now pay $175
until it is paid off. When that one is finished, take
the $175 and add it to the next payment and so on.
STEP FOUR - Save the cash!
Don't forget that when your debts are
cleared you have set yourself up for a better financial
future. The best way to take advantage of your new situation
is to use all the money you were spending on debts and
start investing or saving it every month.
With this strategy your debts will clear
faster meaning you will pay less interest, you will
see progress as you clear small debts first, and you
will not be tempted to use the funds for personal use
instead of debt repayment.
It is a worthwhile goal to get out of
debt. Seeing that goal come sooner and teaching yourself
discipline sets you up for a brighter financial future.
You OWE yourself that!
1howto.com
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