Debt Elimination and Lifestyle Change: A community blog

Linda Chavey writes about how to change your lifestyle habits in order to eliminate debt.

Debt Elimination - Step Two

Written by Linda Chavey, Community blogger | Jul 31, 2012 3:29 PM

If you have completed step one, you should have a list of all debts owed. 

Place them in order from the littlest debt to the biggest debt, in dollar amount. 

Add these columns to your list: 

NAME OF DEBT

TOTAL OWED

DUE DATE (DAY OF MONTH)

MONTHLY MINIMUM PAYMENT 

INTEREST RATE 

Use a spreadsheet that can be altered so more columns can be added. Excel is ideal for creating and storing your list. 

Example would be something like this: 

NAME OF DEBT          TOTAL OWED           DUE DATE           MIN PAYMENT    INTEREST RATE 

JC Penney                     $500                            12                          $25                          22%

Macy's                            $1000                           15                         $45                          18%

VISA                               $2000                           1                           $65                          18%

MASTERCARD           $5500                           15                         $120                        19%

CAR #1                          $9500                           1                          $375                        5.5%

CAR #2                          $17000                        15                         $435                        6.5%

MORTGAGE                 $140000                      1                           $1400                      4.5%

NOTE: Some of the information in the spreadsheet will be used purely for realization purposes. It will also be used for other purposes and exercises. It is important to include all information in this spreadsheet. 

Analyze the debts on the list. Add up the monthly payments and imagine life without these payments. It is possible. It just takes determination and discipline. 

You are now ready for step three. 

Published in Debt Elimination and Lifestyle Change: A community blog

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