Tuesday, November 4, 2008

Getting out of debt!

Yeah, I know this topic is a teeth-grinder. It is for me, anyway. I hate talking about finances. It really stresses me out. When my husband and I got married, we didn't really have a system; never had a budget. When I was in highschool I kept a very detailed checkbook, but when I got married, it was difficult because I couldn't keep track of what BOTH of us were spending.

On Sunday, we had a lesson on getting out of debt and financial success. She mads some REALLY good points that everyone should know.

To get out of debt:

There was a model she showed us that works to get people out of debt quickly. What you do, is

1. You gather all of your 'debts' or things you are making payments on and put them in a row across the top of your paper, or Exel program, or whatever. This could be your car payment, credit cards, RC Willey furniture, school loans, etc.

2. Under each, write down your minimum required payment. Make adjustments to your budget and make at least minimum payment for each every month.

3. Have a yard sale, or sell a piece of furniture, or something to earn a chunk of cash to pay off the FIRST debt on your list.

4. Now, take the amount that you WOULD be making minimum payments on in the first column and put it UNDERNEATH the 2nd MINIMUM PAYMENT. So now what you were paying on the first column, you are paying that on what you are already paying in the 2nd column. Make sense? So once you pay off the second column, you add ALL that amount to the third. It just keeps getting easier and easier as you put more and more money on that one payment! It's a snowball effect to get you out of debt quickly!


1. Make one that will work for you. A lot of the time people make a budget that they just never use.

2. Include EVERYTHING in your budget, even the ugly stuff. It will NOT work if you cheat!

3. STICK to the budget!

4. Even though it is hard to face the reality of where your money is going, it will give you good incentive to cut back where you need to.

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