Digging your way out of debt can be a slow and sometimes stressful process. It can take even longer if you and your spouse are paying down debt with no real plan. Making a debt goal chart can give your debt repayment some structure and help you see the progress you're making each month. Watching your debts decrease will give you the motivation you need to make it to the finish line.
Figure out how much money you'll pay toward your debt every month. The snowball method involves paying a larger payment each month to one debt and paying the minimums on all the others. As you pay off one debt, you snowball the payment over to the next debt on the list until all your debts are gone.
Create a spreadsheet using Excel or a similar computer software. You'll need to make a chart with six columns: creditor, current balance, interest rate, minimum payment, actual payment and payoff date. You can also make your goal chart using pen and paper, but a spreadsheet is easiest to update from month to month.
List all of your creditors in the "Creditor" column, in the order that you plan to pay them off. You can list them from highest to lowest based on the interest rate or from lowest to highest balance. Paying down high-interest debt first can save you money, but attacking some smaller debts right away can give you an emotional boost if you've got a lot of debt to pay off.
Fill in the current balance, interest rate, minimum payment and actual payment for each debt. Multiply your current balance by the interest rate and add it together. Divide the total by your monthly payment to get your payoff date. For example, if you have a $3,000 balance at 18 percent interest and you plan to pay $300 per month, you'll have it paid off in just under 12 months.
Update your current balance each month after you make a payment. When a debt gets to zero, you'll need to update your actual payment for the next debt on the list. Highlight each debt as you pay them off to give you a visual for how far you've come.
- Treat yourself to some small reward every time you reach a milestone in your debt payoff.
- Go over your budget periodically to look for areas where you can cut spending. Add any extra money you find to your debt snowball to get out of debt that much faster.
- Seek help from a certified credit counselor if you're having trouble reaching your debt goals. A credit counselor can help you and your spouse fine-tune your budget and your debt payoff plan.
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