Eliminate Debt Quickly and Achieve Financial Abundance - Part 2

If you arrived on this page without reading Part 1, then click here for Part 1 of how to Eliminate Debt with the Debt Stacking Method






OK, you've come up with an acceleration amount you'll use with the Debt Stacking Method.

Now, list your debts from the smallest balance on down to the largest balance. You're going to start with the smallest debt first, which is most likely a credit card.

Instead of paying more than the minimum on several credit cards at once, you're going to only pay extra on that first credit card. On all the credit cards, car loans and mortgage below that one, pay only the required minimums.

The next part of debt stacking is going to require discipline on your part. After the first credit card is paid off, take the full amount you used to pay on it (minimum plus the extra $50, $100, etc) and add that to the next debt on your list.

You can't take this money and go spend it somewhere else. You'll be in debt bondage forever. Stay disciplined with this plan and it will work for you.

When the second debt is paid, add the total you were paying on it to debt #3. Keep doing this until all your debt is gone.

Here's an example:

• Credit Card #1 has a balance of $2500 with a minimum payment of $65
• Credit Card #2 = $4500, Minimum Payment = $115
• Credit Card #3 = $6000, Minimum Payment = $150
• Credit Card #4 = $9500, Minimum Payment = $240
• Car Loan = $13,000, Payment = $450

For example purposes, let's say you have budgeted $100 as your acceleration amount to help you eliminate debt. You'll start by paying credit card #1 $165 each month (the minimum of $65 plus $100 acceleration amount) and then pay only the minimums on the next four debts.

When card #1 is paid off, you now add that $165 to the $115 minimum that credit card #2 wants. This means you'll now pay card #2 $280 each month. By the time you get to your car loan, you're paying your entire $1,120 debt budget to your car loan!

Do you see how fast you can eliminate debt once you get this ball rolling?

By the way, here's how I arrived at that $1,120 "eliminate debt" figure: I added up all your minimums plus your acceleration amount, $65 + $115 + $150 + $240 + $450 + $100 = $1,120)
Are you realizing the power of this strategy as each debt is eliminated? You're hitting each successive credit card with a higher payment, thus being able to eliminate debt much more quickly. It goes slow until you get the first couple paid off. Have patience and you'll be out of debt in no time.

When I used to help clients during my financial planning days, some would be on track to be out of debt in 50 years. Once I showed them that they could eliminate debt in 3, 4, 5 or 10 years, depending on the situation, they called me a friend from that point forward.

I didn't use a mortgage in this example, but imagine a figure such as $1,120 a month to add to your mortgage. How long would it take to eliminate that debt from your life at that pace?

Pretty exciting, huh?

Debt stacking works. Put this plan to work for you. Eliminate debt. Add financial abundance to your over-all life abundance pursuits.

Change your life,

Matt


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