How to pay off all my debts
How I did it: This month marks the payoff of my final unsecured debt. While I still use my credit cards, I'm now in a position to pay them off every month. I committed over $1200 a month to accomplish this goal, and it feels good! Now, I have $1200 a month to put into savings, buy that big-screen TV, travel, etc. The freedom feels so good!
I looked at all the "Must-pays" committed to debt going out every month. That, and the interest I paid which was money being flushed away, were great motivators. Also, the attitude of Wall Street & my credit card companies drove me to want to spite them by taking their profits away.
The downside is I'm having medical problems that will hit my pocketbook. At least I'm not straddled with the other debt, too.
Lessons & tips: Separate your "Wants" from your "Needs." Make sure you have enough money to cover your Needs, including getting a second job if necessary.
Recognize that your Wants will change a week, a month, a year from now. Four months from now, the price for that 55" HDTV will be significantly reduced, with a better picture and more features...why not wait?
There are lots of tools online to help you understand the impact of paying even $5 extra a month on your debt...focus on the high interest cards.
Resources: Microsoft Excel - Very powerful tool. Can help track your debt and allows "What-If" scenarios. You got a $100 bonus? See the impact of applying it against your debt. See how quickly your debt decreases when you don't use your cards.
CNN's Debt Reduction Planner: http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp
