First of all, figure out your budget. How much is each payment? List the debts in order from smallest to largest. Make payments to each, EVERY month. List the following information:
Do this for each bill.
By paying the bills in this way, when one is paid off, you can make progress very quickly on the list of bills, without changing your budget/spending. It's very easy when a bill is paid off, to simply incorporate that money into the spending. By exercising discipline in paying the bills off in this way, when you get all the bills paid off, you can now put the money into savings, which was previously spent on these "one-time bills!
I hope this system of bill paying helps others who are struggling with finances! I have found that most people are good about working with a person if they receive regular payments. This way, everyone gets a little something, and the top bill on the list gets the most. By the time you get to the bottom of the list, you can make a hefty payment instead of the $25 (or whatever) you previously were able to make! Good luck!
Source: Another single mom struggling to make ends meet!
By Bzladi from Storm Lake, IA
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This is what Dave Ramsey teaches. I think he deserves the credit, and he would say that God deserves the credit.
I also used this method 20 years ago to get out of debt. I still use a credit card but I pay the balance in full each month so I don't incur a finance charge. One additional item to consider is putting the bills in order by the size of the interest rate. If you start paying off the highest interest rate bills first you will be saving more money in the long run.
I just started doing something similar. Great idea here. So I'll give you a big thumbs up for this tip.
That's a good plan. It would also help motivate a person not to run up more bills, since they know they'd have to add them to the bottom of the list and watch some of their progress disappear. And it's a great help in motivating someone to take money that they might have spent on something else and apply it to an old bill, since they can actually see progress being made.
Michelle, You are exactly right. One needs to exercise discipline in not running up MORE debt while digging out of debt!! Have to use common sense! I also found that paying by cash and money order while things were so tight was helpful. No credit card or checkbook during that time of my life! No way for me to spend money I didn't have. When it was gone, it was gone! Have to really figure out "wants" vs. "needs"! Pam (Bzladi)
This is a great idea, but it only works if you stop spending money on things you don't need and running up other bills that end up at the bottom of the list. Thanks for the tip, hope people take your advice.
This is a really great idea, and I can see how bills would get paid off much faster. Excellent.
Leah, Queensland, Australia.
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