My Plan to Live Debt-Free - Progress Report - April 2010
Total Credit Card Debt = $7900.00 / Current Balance Owed = $7481.35 / Current % Debt = 94.70%
Finally - some progress! It feels good to finally these numbers go down. The plan is working and it provides great incentive to remain diligent. Of note, Phase I of the plan is complete and the big bad loan with the super-duper ridiculous interest is gone. Sing with me...
Ding dong - the loan is paid, the loan is paid! Ding dong - the dreaded loan is paid!
Now onto two Phase II - tackling the credit cards. There are a lot of great resources out there on the internet, but the best tool I have found is a credit card calculator that I found on CNN's Money website. (http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp) It is easy to use with only two steps.
Step 1 - Enter your credit card information: For this, you will need to pull out all your recent credit card statements (or if you are like me, look them up online) and write down all your balances and current interest rates. I have them entered in a spreadsheet, along with the statement dates, which now is easier to track because of the new credit card law. After you have done that, plug in that information. I rounded my interest rates up for easier data entry.
Step 2 - Choose a plan: This step allows you to chose a plan by using three methods to pay off the cards or as I like to call them, three strategies.
Minimum payment (boo - hiss) - this is the strategy that most of us are doing due to the recent economy. However, this strategy will cost more in the end because you will pay more interest as opposed to the amount you would pay if one of the other strategies are applied.
Fixed payments - This strategy I like to call, "steady as she goes" due to this is the same amount you will pay throughout the plan, no matter what. What is great about this, is that you can reviewing all your statements and reviewing your budget, you can realistically set a fixed amount to tackle this debt. You can add more, but never less.
Debt-free deadline - This is a tricky one to describe and the most difficult to follow. It can be as aggressive as one can handle. This strategy is hard to follow, but you can fall behind and slip down a slippery slope, paying only minimum payments. If you chose this plan, play around with the time frames to see how the payments work out.
After you have chosen a plan or strategy, copy and paste it to a word or spreadsheet document. Print it out and place it where you can see it daily for motivation and inspiration. Find a quote that will ties into your goals, or better yet, a Bible verse to inspire you. I've said it before, and I will continue to say it again - we can do this. We just need have faith and the debt will go away.
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