Solve Your Debt Problems

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Solve Your Debt Problems Powered By Docstoc
					by: Carrie Reeder

Although it would be wonderful if debt would magically disappear, the only way to get rid of it
is to pay it off. Almost everyone has some sort of debt.

Although getting rid of debt is not as simple as accumulating it, there is a way you can put a stop
to the downward spiral. There is a three step plan that can eliminate financial problems for
everyone. The three steps to solving your debt problems include: inventory, prioritize, and
rollover.

Take Inventory of All Debts Owed - Make a list of all credit cards, personal loans, student loans,
car loans, etc. Next to each line item, list the interest rate and minimum payment required. After
you have come up with all creditors, rewrite your loans in a different order. This time, line them
up starting with the highest interest rate loan and ending with the lowest interest rate.

Prioritize Your Debts - The next step, is fairly simple because most of the work is already done
for you. Each month pay only the minimum payment on every single loan except for the loan at
the top of the list. The loan at the top has the highest interest rate, and therefore, is costing you
the most unnecessary money. Every time you get any extra cash in the month you put it towards
this loan and this loan only. You will find that this loan will quickly diminish until it has
disappeared.

The Rollover Strategy - Rollover is the next and final step to the debt elimination system. Once
the first loan on your list is paid off, simply rollover ALL the money you used to pay for that
loan and roll it over to the next item on your list. This should be the loan with the 2nd highest
interest rate. Each time you pay off a loan you add more money into your payment pot. This
makes the next loan all that much quicker to eliminate. It becomes a snowball rolling down the
hill, picking up more snow and more positive momentum.

If you are in a situation where you need help solving your debt troubles, this system does work.
The best thing you can do for your financial future is to take the bull by its horns and proactively
work on solving your debt problems.

This article was posted on January 13, 2006

				
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