Stack Your Debts: A Simple Four-Step Plan to Reducing Your Debts

Are you feeling trapped by debts you accumulated long ago?



If you are able to pay your current expenses – and aren't sinking further

into debt – but you're still feeling dragged down by old debts and

nagging monthly minimums, this plan is for you.



It's a simple four-step process you can follow to help you regain control over

your finances.



Step 1 – List all of your debts, starting with your smallest debt (no

matter what the interest rate), and followed by your larger debts. In your list,

write down your largest high-interest debts (such as those from credit cards) before

your largest low-interest debts (such as lines of credit.)



Step 2 – Continue to pay the minimums on all debts and put extra money

toward the smallest balances first. When you do so, you will feel

motivated and empowered in the debt-elimination process and soon you'll

be paying off even more of those debts, and crossing the debts off your

list, one by one.



Step 3 – Roll your payments forward. When you have paid one debt

completely, add the funds that you were paying toward that debt

to the next debt on your list. For example, if you are making $150

payments to your smallest debt, you would add that $150 each month

to the next debt on your list once the smallest debt is paid off.

When the second debt is completely paid, roll all of these payments

to the third debt until all debts are paid.



Step 4 – When all of the debts on your list have been paid off,

take the money that you had been using to pay these debts and put

it in savings or toward your investments. This will insure that you are

not creating a higher cost of living for yourself once your debts

are paid.



This simple plan can help you develop the discipline for a bright

financial future as it helps you to pay off debts fast.