The Get Out Of Debt (GOOD) Plan is something you put into place so you can stop giving all of your hard earned money away. This system will help you know exactly how to get out of debt and when you’ll be done with debt.
The wrong way to get out of debt:
- Paying minimum payments for however long the company wants you to (hint, it will cost MUCH more than if you pay it off early)
- Paying a little more here or there (you’ll never get anywhere that way)
- Using one debt or a new debt to pay another
- Continuing to fund purchases with debt
- Worrying more about interest rates than behavior modification
- Paying debt off with what you have leftover (putting debt last)
The right way to get out of debt:
- Understanding that if you can’t pay for something in cash, by definition that means you can’t afford it
- Getting small wins and snowballing those into bigger wins
- Focusing on behavior change and making progress
- Targeting all of your available resources toward one goal at a time
- Tracking your progress every step of the way
How to get out of debt:
- Set up your Rolling Budget.
- Cut up all credit cards / loans and call to close accounts.
- List out every debt including the balance, the minimum amount and the due dates smallest to largest.
- Use your budget to determine how much extra you can put toward debt each month.
- Pay off one debt at a time, smallest to largest, adding the minimum payment and extra each month to the next debt on the list.
- Brainstorm ways you can knock debt out including a part time job, garage sale or downsizing.
- Calculate how long it will take to pay off your first debt using the minimum payment + the extra each month.
- Calculate the same for each debt on the list, being sure to account for the months of minimum payments that will be paid on debts as you move down the list.
- Print out a debt tracker and post it where you can see it everyday to stay focused.
You know we don’t hold back. We love you enough to be honest and call you to a higher standard.
Getting out of debt is so liberating.
Most people just accept that they’ll have payments for the rest of their lives. We don’t believe that for you!
The money that you bring in every month should be funding your future, not your past! If you can discipline yourself enough to stop spending long enough, you can get out of debt and build enough wealth that you will never need to go back into debt.
You’ll become your own bank! You’ll use cash to pay for things and purchases will become a blessing not a burden.