Self Help Budget
- Debt Elimination -

     The absolute first step to getting yourself out of debt is to develop a budget and live by it! The foundation to this process is understanding your expenses and not only how much they are but when they occur. Learn the details in our Money Management section by clicking here!

Find out how to get control of your personal budget

     Once you've developed a financial plan you can stick to, the next step is to use a debt payment plan that will eliminate your debts. I recommend the payment push plan found on bankrate.com 4/7/03. This plan is simple and realistic.

     The absolute first part of this is to STOP acquiring any new debts. That means you can't use your credit cards anymore. If you don't have the cash to pay for something you can't buy it!

     The next step to the payment push plan is a mindset. You need to convince yourself that by living on a very tight expense plan and not buying things you don't need, will allow you to become debt free quickly compared to continuing on with your current spending methods. You should write your goals in a place you can read them everyday. For example, buy bringing my lunch to work instead of eating out I can save an additional $40 a week.

     The next step is to list all your debts on a table. The information you want on each debt is the name of the debt, interest rate, balance due, current payment and the payment push period. List each debt in the table ordered from highest interest rate to lowest.

     Finally, you are ready to apply the payment push. Determine how much extra money you can pay to the first debt on the list by living on a very tight expense plan, cost cutting and any additional income you have. Calculate the payment period to pay off this debt, applying the additional money you now have from your budget, and place it in the payment push period field. Continue to pay this amount or more each month until that debt is gone. At this point move to the next debt on your list. Continue this method until all your debts are gone.

     Remember the key to this method is your budget and making that budget as tight as possible. Cut all the costs you can and continue to look for ways to remove expenses. Do you really need those thousand anytime minutes on your cell phone. Is there a cheaper plan that will work? Maybe you can get away without a cell phone altogether! Look hard and remember its all in you mindset. (bankrate.com, 4/7/03)



Find out how to get control of your personal budget


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