Wisdom Farms

Wise Words From My Wife

I discussed in other columns that debt is straining marriages, causing stress and destroying retirement dreams all across this nation.

Your first priority must be to take that first step of recognizing there is a debt problem. Once you determine you want to change the way you manage your finances then you are ready to take the necessary steps to eliminating the debt.

Getting in debt did not happen overnight (in most cases) and it does not get eliminated overnight (in most cases).

The first thing you want to do is gather the most recent credit card statements you have for every one of your credit cards. Gather all other debt payments that you owe such as car payments, mortgage payments etc.. The easiest way to get those debts paid off is to do what I call debt stacking. Here is example.

Credit Card A balance = $1500.00 at
21 % interest with monthly payment $50.00

Credit Card B balance = $850.00 at
17 % interest with monthly payment $35.00

Credit Card C balance = $800.00 at
17% interest with monthly payment $35.00

Credit Card D balance = $200.00 at
24% interest with monthly payment $15.00

This is how debt stacking works. You would take these payments and make the minimum payment until one of the credit cards was paid off. In this case it would be the $200.00 most likely. Once that balance is paid (while continuing to pay the minimum on the other cards) you take that $15.00 dollars you were already used to spending and not having in the budget, and apply it to the next credit card payment. You would then be paying $35.00 + $15.00 = $50.00 towards the $800.00 balance. Once that credit card balance was paid off you then take the $50.00 + $35.00 = $85.00 and pay that amount towards the next credit card balance of $850.00, and once that one is paid you put the $85.00 + $50.00 = $135.00 towards the $1500.00 balance. The momentum takes effect and before you know it they are all paid off and you have an extra $135.00 per month to put into a savings account.

This only works though, if you are willing to cut those cards up and stop spending on them. I tell people to have one credit card in case you are in need of a service that only accepts credit cards, but make it a point to pay the balance off at the end of the month. Never use a credit card to purchase anything you cannot pay in full when the bill comes in at the end of the month.

Once these high interest, credit cards are paid off then use the same method to pay off the car notes and mortgage much faster.

By working this simple debt stacking method you can shave off years of debt and interest payments saving yourself thousands of dollars wasted on interest payments. Not to mention the peace of mind you can have by not being a slave to debt.

Phillipians 4:19 And my God will supply all your needs according to His riches in glory in Christ Jesus.

In His Service,

Ray&Tracye Gano
Prophezine

Our ministry - http://www.prophezine.com

Our CD - Escape The End Time Money Snare - http://www.endtimemoney.com