PERSONAL DEBT – 6 STEPS TO ELIMINATE IT
You may be in a position where your personal debt is getting in the way of achieving financial freedom. Robert and Kim Kiyosaki were in the same position after Robert’s first business failed. Once they learned how money worked, they implemented a plan that would lead them to becoming debt free in a few years. Robert Kiyosaki is one of my financial mentors that opened my eyes in the earlier 2006 through his Rich Dad, Poor Dad series.
Here are six simple steps Robert and Kim used to eliminate personal debt.
1. Keep your debt in check.
If you have credit cards with outstanding balances, discipline yourself to use only one or two. But, any new charges must be paid off every month.
2. Increase your cash.
Find a way to come up with an extra $200 per month. By increasing your income with a side job or by cutting back on doodads, this should be relatively easy to do.
3. Focus on one.
With the extra $200 each month, apply that to your monthly payment on only one of your credit cards. For that one card you’ll be paying the minimum payment plus the extra $200.
4. Continue the pattern.
Once your first card is paid off, continue that method on your next card. With each debt you pay off, apply the full amount you were paying on that debt to the payment of your next debt. As you pay off each debt, the monthly amount you are paying on the next debt will escalate.
5. Tackle all debt.
Once all your credit card debt is paid off, continue the same methods with your car and mortgage debt. If you follow this procedure, you’ll be amazed at the shortened amount of time it takes to be completely debt-free.
6. Time to build your wealth.
Now that you are completely debt-free, take the monthly amount you were paying on your last debt and put that money toward investments. Get your money now working for you.