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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 Three

Written by Linda Chavey, Community blogger | Aug 6, 2012 3:24 AM

Now that you have your list that you created in Step Two, you can create the remainder of your spreadsheet. 

You now want to pinpoint any extra money that you are spending that can be eliminated and applied toward your debt payment. 

The categories below tend to be areas where Americans spend a high amount of money:

Restaurants / Dining out

High-end, take-out coffee and beverages

Clothing and accessories

Nail and hair treatments

High-end vacations

Grocery impulse purchases (items not on list)

Entertainment (movies, concerts, amusement parks, etc.)

Media (music downloads and high-end cell phones)

Alcohol and cigarettes 


Toys, including children’s and pets 


Now, determine where you can reduce your spending. 

For example, say I spend $25 on nail treatments, $25 at the movies and $175 on dining out per month. That totals $225 in extra money that I can put directly towards my debt. Wow! 

In order to find extra money, you should be tracking your spending to pinpoint these purchases. 

Now, add these two columns to the spreadsheet:



I will now take the $225 that I determined to be extra money I can save each month and put it in the JC Penney row under "Extra Money".  Then add the minimum payment to the extra money figure. This will total $250. JC Penney will be paid off in 2 months!! When JC Penney is paid off, you take the $250 payment and apply it to the "Extra Money" column in the 2nd column, which is Macy's. You will then add the $250 to the minimum payment of $45 to total $295. Macy's will be paid off in less than 4 months! Wow! You can really get somewhere with a system like this. It also gives you motivation as you make progress more quickly, paying off the smallest debts. Some believe paying off the debt with the largest interest rate is the way to do this spreadsheet. The only problem I see with that method is it may kill motivation as that particular debt with the highest interest rate may be rather large and take several months to pay off. Starting with the lowest interest rate, you will obtain results more quickly, which should improve motivation and get you closer to your goal of NO DEBT. 

You can also add a column for the months that it will take to pay the debt off. Take the "Total Owed" and divide it by the "Total Payment". This will give you the months that it will take to pay the debt off.

Calculating the interest rate along in the spreadsheet will give you a more accurate payoff in months. I do not use the interest rate in my spreadsheet for simplification reasons. 

When you finally get to the bottom of your spreadsheet to the Mortgage line, you will have $2,690 to pay on your mortgage each month. That 15 or 30 year mortgage will be reduced to approximately 52 months to pay off. That is 4 years and 3 months! AMAZING! 

Just remember - anything is possible with determination! Post your accomplishments if you would like. Email me at if you have questions. 


JC Penney                     $500                               $25                         $225                             $250 

Macy's                            $1000                             $45                         $250                             $295

VISA                               $2000                             $65                         $295                             $360

MASTERCARD            $5500                              $120                      $360                             $480

CAR #1                          $9500                             $375                       $480                             $855

CAR #2                          $17000                           $435                       $855                            $1290

MORTGAGE                 $140000                         $1400                    $1290                          $2690 

NOTE: "INTEREST RATE" and "DUE DATE" were taken out for simplification. "TOTAL PAYMENT" was added. They are still important fields to have in your spreadsheet but are not needed during this particular exercise. 

Published in Debt Elimination and Lifestyle Change: A community blog

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