Best Debt Elimination Plan

I challenge you to embrace and implement the “best” debt elimination plan. I call my plan the best because it gets you out of debt faster than any other, and in the interim does it for the least amount of money.

It’s you, however, that ultimately makes it the best. No one can alter your spending habits and save more money but you. You can’t hire someone to do it for you. Owning up to that fact is the first step in debt elimination, and you’ve already taken it!

Debt Elimination Percentage

Take your debt elimination percentage right off the top of your paycheck. Direct it toward your highest-interest-rate debt first, then the next highest, and so on until all your unwanted debt is gone.

Choose your debt elimination percentage carefully. The challenge is setting your debt elimination percentage high enough to get you out of debt quickly, but reasonable enough to allow for life’s necessities.

Once you commit, have the discipline to stick with it to the end. You’ve got to defend your debt elimination percentage at all costs! You’ll be debt-free and back to wealth-building in no time.

Multiple Debt Elimination Example

Trimming Expenses

If you financed your car purchase, that’s probably one of your biggest expenses. Avoid the new-car smell. Get out of debt faster by spending your money on debt elimination instead of steep depreciation and interest.

If you’ve got high-interest credit card debt, that’s another big expense. How and when you make your credit card payments matter. Add your debt elimination percentage to your regular payment and transfer funds the same day your paycheck clears.

If you’re debt-desperate and willing to risk it, you can save money on insurance by raising your deductibles or going without.

For more on trimming expenses, check out my top 10 ways to reduce your expenses.

Divert Savings

Whatever you’re currently saving, temporarily divert it to your debt elimination plan. For instance, if you’re saving for the down payment on a personal residence, a very worthy financial goal, switch it over to debt reduction.

Consider doing the same for IRA contributions and employer retirement plan contributions too. If you’re lucky and have an employer match, contribute just enough to get the full match. All the rest temporarily goes toward debt reduction.

Make Some Changes

As you can tell, I’m looking to shake up your financial house a bit. That means potentially changing lifelong habits and overcoming societal pressures. I’ll provide the information you need in easy-to-understand language with lots of examples. You add a bit of enthusiasm and discipline. It’s well worth the effort.

Buy the Book

Savings and Spending

Saving money is necessary and important. The money you save in the near future is the fuel that will get you out of debt. Once you’ve eliminated your unwanted debt, your most important money can go toward your investments, wealth-building, and financial dreams.

One way to favor saving over spending is to pay yourself first. I recommend taking your debt elimination percentage right off the top as soon as your paycheck clears. Direct that money to your debt elimination plan the same day and avoid extra interest charges.

Emergency Reserve Fund

Maintaining your debt elimination percentage and living on what’s left over can be hard. Sometimes, often through no fault of your own, your budget takes a hit. An unexpected expense pops up or your income is interrupted. You need a little wiggle room.

That’s what an emergency reserve fund is for. It isn’t for a doctor’s visit or a minor car repair. Those expenses should be budgeted. It’s for true unforeseen emergencies.

Your emergency reserve fund, as well as other short-term reserves, should not be put at risk. How safe is your money?

Paying and Reconciling Bills

It helps to assign financial tasks to specific times so you’re never late with a payment or overdraw your bank account, which you never want to happen. Plug those dates into your calendar. Other essential financial tasks need to be done as soon as possible.

If you have a significant other and you’re in this together, assign that potentially math-challenged partner of yours some financial tasks too so they become familiar with the goings on. Considering money troubles are often at the root of spousal conflict, getting more financially organized gives you one less thing to worry about.

Expense Tracking

Tracking expenses and standardizing expense categories doesn’t have to be arduous, and it doesn’t matter whether you use the latest smartphone app or the back of junk mail envelopes to do it. Just be sure to account for all the different ways you spend money: electronic transfers, debit and ATM transactions, cash expenditures, checks, credit card charges, and everything else.

Life After Debt

Get excited at the prospect of eliminating all your unwanted debt. Get even more excited about your life after debt.

Once you’ve eliminated your unwanted high-interest debt, change your debt elimination percentage to your savings percentage. Leverage those new-found saving and spending skills into something spectacular!

Start developing a prosperity mindset. Invest in financial goals that make profound, positive differences in your life and the lives of those you love.

For shorter-term goals, funnel your savings percentage into money markets, CDs, and high-interest savings accounts. For longer-term goals, devise a stock and securities investing plan within Roth IRAs and 401(k)-type plans.

Work on improving your credit score, too. One way is to improve your credit score using a credit card.