The Debtonator's Debt Elimination Challenge

"The better a man is, the more mistakes he will make, for the more new things he will try. I would never promote to a top-level job a man who was not making mistakes...otherwise he is sure to be mediocre." - Peter Druker

Although I believe credit to be a useful financial tool, I also believe that America, as a society, have become too dependent on credit and credit cards, using them to pay for cost of living expenses. There is currently no require courses in our school system to teach our children about the power of credit and compound interest and we, as a nation are sinking further into the abyss of runaway debt.

This is the reason I am issuing the Debt Elimination Challenge – 90 Days to Financial Freedom. In this challenge I intend to educate the consumer, young and old as to the responsible use of credit and not just managing but eliminating your debt.

But will my challenge be accepted?

That is the question. Have we become so dependent on our use of credit that we will remain slaves to our credit cards? Will we actually choose to remain indentured servants, working two jobs, just to pay our credit card bills? Will remain a nation dependent on credit cards?

These are questions that all consumers must ponder. As your monthly bills are developing into a mountain of debt, you, as consumers must decide if you will continue to accept rising interest rates and escalating fee’s or if you have had enough and desire a change.

Because it is when you truly decide, to make a commitment to yourself, that things will change.
Those that are brave enough to accept my challenge must be sick and tired of this lackluster economy and is willing to take an aggressive approach to their debt problems. The first step is to have a debt management coach that will show you the steps you need to take to eliminate your debt.

It’s time to be debt free.

But where do you start?

First of all, you need to stop charging. No matter what. Stop the bleeding. Do nothing more to increase your balances. In fact, total them up and let’s see how bad the damage is. Now, it’s decision time. Some questions to ask yourself are:

Are you behind on your payments?

Are you only making the monthly minimum payments?

Are you struggling each month meeting your monthly obligations?

Are you possibly thinking about bankruptcy, or are you looking at debt relief programs?

What are you willing to do to eliminate your debt?

Getting rid of your debt should now be your top priority. In the quickest way possible. For the least expense. Debt settlement here is the best way to do this. Your total amount of debt will be paid off for about half of what you owe in about three years. This type of program can be completed sooner, depending on the amount you owe and what you can pay each month.

Also, let’s take a look at where your current income is going. Here’s part two of my challenge, that I call my 30 day challenge. For the next 30 days, get a receipt for every dime that you spend. Every purchase, no matter how small or large. Save these receipts in an envelope for 30 days and see where your money is going. This may come as a shock to you, I know it did me when I first done it.

Can you make some adjustments in the way you spend? Can you brown bag a couple of lunches during the week? Are there any other adjustments you can make?

Develop a spending and savings plan.

A spending plan is another tool that reveals the impact goal setting could have on your personal finances. A spending plan, or budget, is your first step to building financial responsibility, and it is critical to effective decision making when developing your goals.

Financial goals will not necessarily have a dollar amount affixed to them. This will require that you either generate more income or reduce expenses or possibly, if you already have monies allocated, shift monies within your plan. In any case, your spending plan will let you know if your goal is financially possible.

For a workable savings plan, four steps are necessary:

Add up your total income, including any funds you receive in addition to your earnings.

Figure out your total fixed expenses such as rent or mortgage, insurance premiums or car payments.

Provide for a savings fund, adequate to meet emergencies and achieve special goals.

Estimate how much you need for day to day living expenses.

You may need to do some adjusting of the amount in each step until you have what you feel is a satisfactory plan. After going through each step and filling out the worksheet, you will have a better idea of where your money is going and how much you have left over to work with.

After following these steps and changing the way you think and act about finances for 90 days, you will break any of the bad habits that you have developed over the years and will be well on your way to living a debt free lifestyle.