If you are currently experiencing a lot of debt (specifically consumer debt) - you are probably feeling a lot of pain right now.
And I am sure we can all agree that you have to get out of it - and fast.
Whichever way is going to work for you.
The first thing we need to do is develop a plan.
There are a couple of ways to get out of debt more quickly...
and both avenues have their benefits.
1.
Debt Consolidation Loan or Refinance 2.
Fast Debt Repayment Plan Of late we have been having numerous enquiries into debt consolidation loans.
For some of you that is the best option.
For others where debt consolidation is not an option (due to lack of equity, credit impairment, lack of income for servicing etc) today's email is for you.
Our expert lending strategists are able to determine whether your situation would qualify for a debt consolidation loan or refinance - so please contact us for a free phone consultation and we where can assist.
For those of you with current mortgages - you definitely want to get yourself to our BRISBANE seminar next Tuesday for even more ways to reduce your debt - including your home loan! Even if you ARE going to be refinancing, these principals should be known and implemented immediately.
The sooner you pay your debt off (in whichever way) the better off you are going to be financially & emotionally.
So here we go!! THE PLAN: Develop it, stick to it and make the commitment to yourself and your family that you are going to do whatever it takes and is necessary to reach your end step.
Your goal - which is to eliminate this debt! The thing is though - lets remember that this is a plan, and in theory they will all work.
However the main missing ingredient that most people have is that they DO NOT IMPLEMENT! Well it is that and the fact that people make their budgets impossible to stick to and extreme.
And this is where the best laid plans can fall short.
In my opinion, you are most assured of success, when you have someone to and guide you keep you accountable.
This is where we can help - with our accountability coaching, contact us if you would like more information on this.
When looking for any debt repayment plan - you need to consider a few things.
These are the general principals and ones that we follow when working with our clients.
1.
Is the plan specific and realistic? 2.
Is it easy to prepare and update? 3.
Is it simple to understand and follow? 4.
Is it easily accessible? 5.
Are the results/end step specific and measureable? 6.
Is there a specific end date? The following FAST debt repayment plan fits the above and much more.
1.
NO MORE NEW DEBT The fact is - that unless you are willing to cease all new unsecured debt, you are not going to achieve your goal.
The problem lays that if you don't make this commitment to stick to this rule - you will only be managing your ever constant debt AT BEST - instead of reducing and keeping it gone! It is really quiet simple - NO MORE NEW UNSECURED DEBT! 2.
PAY REGULAR AMOUNTS Once you have completed your BUDGET (YES THE DREADED WORD) you have a clear idea of where your money is going - and where you can perhaps shave some of your expenses.
It is then important to recommit to the FAST debt repayment plan.
At this point you need to commit to making the same regular repayments of your debt EVERY MONTH (or week depending on your repayment plan) IGNORE THE MINIMUM REPAYMENT.
This is the lenders way of getting as much interest out of you as possible.
Banks are a business like everyone else.
They hold no interest of gain anything by you paying off your debt more quickly.
3.
SORT YOUR DEBT You want to sort your debt in order of 2 things.
- Repayment Term.
- Debt Amount/Balance Firstly sort your debt in order of repayment term - the one with the shortest amount of time to pay it off goes first, and so one.
Then within this order look at the limits - smallest to largest).
If all of your debts are credit cards - with no repayment term.
Sort them in order of Interest Rate highest to lowest.
Because you have already determined the amount you are going to use EVERY month to pay off your debts you know exactly what have available.
You want to make the minimum repayment on every debt apart from the one on top of the list.
ON THE #1 DEBT You want to make all the remaining money onto this one debt.
You will make this amount EACH & EVERY MONTH off the same debt.
And you will begin to see something spectacular.
The #1 debt will start to shrink! and rapidly and this is because you are actually paying off the debt - rather than just repaying interest.
The you continue to do this until the entire 1st debt is now repaid IN FULL.
4.
AS ONE DEBT IS PAID OUT, you then take that payment and add it to the repayment already being made on the #2 debt and so on and so forth until that debt is also paid out IN FULL.
This plan works on the rule that you pay the same amount in total towards your total debt, until ALL OF YOUR DEBTS are paid out.
If you implement and execute the principals laid out above - you will have achieved the most important thing - and that is to have taken control back of your finances - instead of letting your finances control you.
If you currently own a home, and want to know how to REDUCE MORTGAGE DEBT MORE QUICKLY, then you must register your seat for our upcoming BRISBANE SEMINAR.
1 week to go! Get your seat NOW.
For more information on BUDGETING - what out for our 2nd tip for the week...
direct to your inbox next week.
or contact us directly for more information.
Have fun reducing your debt!! Until next time