How To Become Debt
Free In Half The Time (Or Less)
By Mike Peterson
With consumer debt at an all time high it's time we take control of
our finances and get out of the "debt trap." Do you realize
that if you owe $2,000 on a credit card with a 21% interest rate, and
you only make the minimum payment each month that you will owe on this
account for approximately 19 years and pay a total of $6725.64 in principle
and interest?
If you are tired of straining under the pressure of debt, take the following
steps and remove this burden in a fraction of the time.
1. No more charging. Commit now to discontinue the use of credit cards.
In fact, cut up the cards that you have, call the companies and close
the accounts. If you have to have a credit card for work try a debit
card (they are widely accepted, and the funds are pulled directly from
your checking account).
2. Figure your monthly minimums for each of your debts and (if possible)
add 5% or 10% to this number. The addition is not mandatory but will
dramatically improve the success of the program.
3. Promise to make the above-mentioned payment from now until the debts
are completely paid off. This means that even though the minimum payment
requirements will go down over time, you will still make the same payment.
This also means that when one card is paid off you will still make the
same payment. Just apply the extra funds to one of the other debts.
That's it, just three easy steps. Now I realize that the emotional commitment
to make this plan work may not be all that easy, but let me give you
something to think about. Remember that $2,000 debt? Yes, the one that
took 19 years to pay off. Using this program (without the additional
5% or 10%) we will pay this debt off in about 8.5 years and save approximately
$2,387 in interest.
Need a little more motivation? If you were to invest that same monthly
payment (the one we were making on the $2,000 debt) at the end of the
8.5 years for the next 10.5 years (you remember, 19 years total) at
a return of 12% you would have approximately $10,682.
Interest is a magical tool. Your creditors use it to their advantage
all of the time. It can also work in your favor if you properly implement
the right program to harness it. If you take the steps mentioned above,
it won't be long before interest is working for you instead of against
you.
(c) 2000 DebtGuru.com
About the Author: Mike Peterson is a Credit Counselor with American
Credit Foundation and has been helping people with their financial concerns
for more than six years. DebtGuru.com can help you lower your payments
and interest on your unsecured debt. Free Report: How to Downsize Your
Debt (via auto responder) Send email to: debtfree@debtguru.com subject
= send downsize report. You can contact Mike at mike@debtguru.com.
