In order to pay your
debt down, you have
to take inventory of
it first. So, set
aside a good amount
of time that you can
dedicate to doing
this. Use the time
to organize your
debt so you can
become debt free and
start living the
life you should be.
Gather all of your
credit card
statements, your
mortgage statements
if you own a home,
you car loan
statement, your
monthly utility
bills and any other
expense you have
each month. It is
important that you
realize this could
take some time. If
you don’t have your
recent credit card
statements and such,
request one from
your creditors. They
usually don’t charge
for this or it is a
few bucks if they do
have to send you
duplicates. The same
goes for your bank
statements. They to
get as many of your
past bank statements
as you can because
you can use them a s
a source for
tracking past
payments, and past
bad behaviors even.
You should be able
to locate all of
your current
interest rates that
you pay on each
bill. This will be a
great tool to assess
your debt. The
amount of interest
you are paying on
your credit cards is
vital to know in
order to get out of
debt. More on that
later...
Arrange all your
loan statements in a
pile with the bill
subject to the
highest rate on the
top of the pile.
Continue to organize
your bills based on
the interest rate,
highest to lowest,
until the bill with
the lowest interest
rate is on the
bottom of the pile.
Be detailed when
doing this. If you
have two cards that
carry the same
interest rate, put
the one with the
lower balance on the
bottom of the other
with the same rate.
Obviously, the bills
on top will be the
ones you want to get
under control first
– they carry the
worst rates, so they
need to go first
see?
Interest rates
change from time to
time take note and
keep an eye on yours
at all times. Being
on top of this make
you more organized
and in better
control of you debt.
Create a chart
Make a chart that
will track your
every credit card’s
balance. This chart
will post all of
your current
balances on your
loan statements and
it will become a
great way to compare
your situations from
credit card to
credit card – bill
to bill.
To make your chart,
create a column for
each debt, plus 5-10
more blank columns
next to it. An Excel
spreadsheet would be
a great idea (but
not necessary) for
creating this chart.
You will be using
the extra columns to
add new creditors as
you are able to
transfer your debt
to lower interest
rate columns.
Use the info form
you statements to
fill in the chart
with each
obligation, the
total amount due,
the annual interest
rate, the minimum
due, the monthly
interest rate you
pay, and the name,
address, and phone
contact of each of
them.
At the top of your
first column, write
the name of the
creditor from the
statement at the top
of your pile you
created. Under the
name of that
creditor write the
address and phone
contact info. Then
under that write the
interest rate from
the loan and then
below that line
write the minimum
payment due.
Skip down a couple
of lines and write
today’s date in the
left hand margin.
Then write the
balance due on the
loan as of today’s
date or as close to
it as you can get.
Credit cards and
mortgages many times
send you monthly
statements showing
your current
balance. Other types
of loans like
student loans and
car loans may not.
You will have to
contact these
creditors to request
them or a current
quote like we
mentioned above.
This is why you will
want the phone
numbers to all of
your creditors on
this spreadsheet!
Now, move on to the
next bill and do the
same until you are
finished and the
least high interest
bill is accounted
for at the bottom..
Tracking your
progress
This is essential
for your ability to
stay on top of
exactly where and
when your money
goes. It is also a
great way to show
yourself all your
progress. After all,
your creditors are
not going to call
you to tell you
about it! If you are
using a computer,
not only will you
want to save your
changes but you will
want to print it and
post it somewhere
with pride. You are
making a difference.
Part 2…
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