Historically, indentured slavery was the result of a laborer under contract of employer for a number of years in exchange for good and services such as food, shelter, transportation and other things. Does this sound familiar? In modern times, we have willing put ourselves in similar situations with major credit card companies because we chose instant gratification while racking up piles of debt therefore becoming a slave to our debt. As it says in the bible Proverbs 22:7 “The rich rule over the poor, and the borrower is servant to the lender.”
Being a slave to debt has the same impact on everybody. It does not matter what your race, class, culture or gender being a slave to debt causes you to feel like you are in bondage and you have limited options.
The G.O.O.D. news is that you can create a plan to get out of debt. G.O.O.D. is an acronym for “Get Out Of Debt”. You just need to stick to it and your financial picture will look better. This requires discipline whether you are acquiring wealth or paying down your debts.
Discipline is one of the most crucial aspects of achieving greatness and securing financial freedom. This unwavering principle will cause you to stay focus during difficult times. Discipline will also stop you from increasing your debt while causing you to decrease your frivolous spending. You will become a wealth builder.
Follow These 5 Simple Steps:
1. Stop spending! You are adding to your debt.
2. Make a list of all your creditors and the outstanding debt owed from the lowest to the highest.
3. Identify the minimum monthly amount required on each debt.
4. Pay the minimum monthly amount required on all cards except one. This debt will be your number one priority. I recommend that you start with the lowest outstanding balance owed and work upward from there.
5. With your number one priority, establish a debt multiplier of at least 100.00. Meaning 100.00 above and beyond all of you all the minimum payment.
Some people like to add a little more on each card, but applying it to one card reduces the time it takes to pay it off. Here is an example of how to pay off debt from by Book “Millionaires in Training.
The “Debt Eliminator“
|Name of Debt||Pmt||Total Debt||Debt Eliminator||Priority||Time|
|Dept. Store 1 Credit Card||$15||$275||$115||1||3 months|
|Dept. Store 2 Credit Card||$25||$500||2|
|Dept. Store 3 Credit Card||$40||$1,200||3|
|Major Credit Card #1||$45||$1,500||4|
|Major Credit Card #2||$90||$3,000||5|
|Major Credit Card #3||$125||$4,200||6|
Now I would like you start paying down your debt right now. I have two questions for you what debt will you pay off first and how long will it take you to become debt-free the sooner we start the sooner we pay it off.
Understanding how to payoff your debts is critical in the wealth building process. The discipline you use for this will help us teach you how to invest your money into something that builds and creates wealth.
Next Week: We will be covering budgeting and how to save money also “Set 4 Life is coming mid September remember it will change your life.