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H o u s e o f O r d e r . c o m |
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Debt Reduction Also see: [Budget Binder] and [Budgeting]
Are you ready for an adventure? Begin by looking at your current debts, calculating which is the smallest, and beginning to reduce and eventually eliminate that debt. To be most effective and stay focused, a family can prepare a graph paper chart with outlined squares which represent the dollars owed. As each dollar is saved and put towards this debt, the squares are crossed off. This way, there is a visual reminder of the financial goal and also a tracking system. In this example the family owes $72.00 in credit card debt and has managed to put away $4.00 towards their goal.
When the first debt is paid off, have a small (inexpensive) celebration. End the celebration by making up a chart for the next biggest debt. Each month use the monthly payment amount from the first debt to help reduce the next biggest debt, and continue to squeeze yourself to save additional dollars for this second goal. Continue with the third, fourth, and fifth debts.
Next comes vehicle debt, and finally housing debt. These are discussed further in the "House of Order" Handbook, Chapter 13, "Finances".
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