The first step to mapping out a plan to eliminate your debt is to organize and prioritize. When you have debt to get rid of, a plan to eliminate this debt can help you. Do not proceed with any debt elimination plans until you have a crystal-clear picture of your debt; how much you have, how much it is costing you each month, and what your options might be.
The first part of your plan to eliminate debt should be to organize. You will never be able to map out a cohesive plan without knowing what your total debt really is. There is a lot of different way to go about organizing your bills. Some people like the old fashioned way of doing it in a cash book, others prefer the more modern version of that and use a computer software-driven spreadsheet. Whichever way you choose is fine as long as you have all your bills organized in a way that’s easy for you to access and understand them. You will also want to plan your payment schedule. This may also include calling your creditors and attempting to renegotiate your payment plan with them. In a lot of cases they will drop their monthly minimum to an amount that you can better afford. Remember, their goal is to get paid, so they may be more amiable than you think once they realize they may see nothing if they don’t make a reasonable deal with you. Once you have organized yourself and your bills, you will want to prioritize.
You want to make sure you pay all of your bills all of the time and always on time. To this end, you need to prioritize. Keep a list of which bills you want to make sure to pay first every month, (this should usually be your lower bills with the higher interest, like your credit cards,) and go down the list from there. A good strategy is to use a wall or desk calendar specifically for bill paying. As the bills arrive, write down the amount on the calendar in the date when it is due. This way, you can see your whole month in front of you. Also write down your paycheck on the days you receive that. You’ll be left with a simple cash flow sheet that gives you a good financial picture. One of the best ways to get rid of debt is to stop having to pay those high interest credit cards. This will save you thousands of dollars every year. All that extra money you’re saving can now be put toward some of you more expensive bills like your mortgage. With just these two things, organizing and prioritizing, you have started a plan to eliminate debt. When you have debt to get rid of a smart plan of attack will save you time, energy, and most importantly money.
One of the quickest and best ways to eliminate mortgage debt is by doubling up on your mortgage payments. It not only saves you time, it also saves you money. The quicker you eliminate your mortgage debt the less interest you will have to pay on it. You can also refinance. With home interest rates at all time lows, you may find that you can save hundreds, if not thousands of dollars a month simply by refinancing your home for that lower interest rate. There are fees involved in doing this, but they are minimal compared to the amount you can possibly save.
How Does This Help One Become Financially Free?
Eliminating mortgage debt helps you economically in a myriad of ways. First of all it looks great on your credit report. To show that you carried such a large loan and paid it off is golden in the world of credit. Without that monthly mortgage you can do a lot of other things that can help to generate you even more income. You could buy another house with your profit; rent the original house you paid off, and use the rent you’re getting for the original house to pay your new mortgage. Again, having 2 homes, but only carrying a mortgage for one of them, is great when creditors are looking into your credit history. Or, if you don’t want to deal with that you can use the profit to pay off other loans you may have. Without any debt, you are free to spend all of your money on anything you may want. Mortgage debt elimination can give you the freedom to become a world traveler or yachtsmen. You may decide that you want to invest your new windfall and make your money work for you, instead of you working for it. Whatever you may choose to do, eliminating mortgage debt is a smart and practical. And it can help you in innumerable ways.