Debt Elimination 3

Planning To Achieve Debt Elimination





Once you have started the process of changing your debt mindset

to be against taking on consumer debt, then that is something

you need to continue until it becomes the norm in your life. In

some ways it is like stopping smoking; trying on will power

alone is not enough, you need to get to the source of your

problem and permanently change it. That is why self hypnosis

can be successful with stopping smoking; it reaches the

subconscious mind and re-educates it. With debt elimination, it

is the same; to succeed permanently you need to have changed the

way your mind works, not just consciously, but sub consciously

too.





In parallel to changing your mindset, you need to plan your

debt elimination strategy. This will depend on you precise

financial situation: your level of debt, monthly income,

monthly commitments, overdue debts and so on. So, I cannot make

specific suggestions for your circumstances, just give a few

pointers to what you can do to head down the road to debt

elimination. You may well get some benefit from debt counseling

or financial planning advice at this stage, but that depends on

you.





Your chances of achieving debt elimination within, say, 5

years, will depend a great deal on your own efforts, so if you

can get through this part alone, then that may strengthen your

chances of success.





Budgeting For Debt Elimination





You need to take a long hard look at your present financial

situation and how it is likely to evolve into the future. For

debt elimination to succeed, you need to be in control of your

finances and keep your finger on the pulse all the time.





The starting point should be a list of your monthly outgoings.

If you are unsure of any item, then monitor it for a month to

see. For example, you may not know exactly how much you spend

on food and other items from the grocery stores each month.

Just keep a record of them for a month to see what your monthly

expenditure is, but in the meantime use your best estimate.





You can then compare your monthly outgoings with your net

income, and this will be the basis of your budget as you

develop a plan for debt elimination. You also need to compile a

list of your debts; how much is outstanding, what the monthly

payments are, and what the interest rate is.





As an example, let us say you have a net monthly income of

$2500, and your total outgoings, including debt and credit card

repayments, are $2300. This means you have $200 to spare. With

your new, anti debt mindset, you want to use that $200 spare to

get your most expensive debts cleared first. There is a good

chance it is the credit cards that are most expensive, so you

can target the most expensive credit card ie the one with the

highest interest. You owe $600 on that card, so in 3 months you

can clear it. When cleared, you can move on to the next most

expensive.





Depending on your debt level this could be a long process;

that's why you need to plan it out and see how you will cut

down that outstanding debt level over the coming months and

years. So long as the total debt level is reducing, you are

heading in the right direction.





Also, take a close look at those monthly outgoings. Are you

sure there's nothing that can be cut out or reduced? Of course

there is, unless you've already gone through that process

recently. Be ruthless with this new mindset of yours; it really

is worthwhile, knowing there will come a day when you don't have

to worry about the odd few dollars here and there. Highlight

those budget items that are unavoidable, and make sure you pay

those first every month, or at least have the money earmarked.





If you rank your debts in order of interest rate cost, and go

for the highest first, you can work through them one by one.

Need a morale boost to get you off to a good start? Then choose

the loan with the least outstanding, and clear that first. It

may not be the best financially, but if it gives you that quick

satisfaction, so the sacrifice may be worth it.





Debt elimination is not going to be an overnight happening. You

need to be prepared to plan for a few years. 5 years is always a

good period to plan for in business, and can be too in your

personal life and finances. You may be amazed at the

transformations you can achieve in 5 years. But above all, you

need to maintain that anti debt mindset. After all, that is

what will bring you to the debt elimination pinnacle.





In the next article, we consider what to do if there is really

no spare in your monthly budget.Roy Thomsitt is the owner and part author of

http://www.eliminate-credit-card-debt-now.com

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