Pay Off Debt – Do It Yourself

September 23, 2009 | Posted by Brad Chaffee

Mr. Money - the enthusiastic, scissor-happy Enemy of Debt mascot.

Have you ever wanted to pay off debt, but questioned whether you could do it yourself?  Many people wonder the same thing, but I know the answer.

Sometimes it’s not the answer people want to hear, because it requires sacrifice and perseverance.  It’s not the quick-and-easy fix that people seem to crave, but it is effective, and the best part is—you can do it yourself.

Believe it or not you are your best chance at getting it right.

Before we get started, let’s recognize some possible reasons people do not believe they can eliminate their debt without outside assistance.

Possibilities include but are not limited to:

• negative attitude
• lack of savings
• lack of support
• poor habits
• no zero-based budget
• lack of discipline
• priorities misaligned
• spending more than you make
• peer pressure (the Joneses)
• common myths
• low self-confidence
• limited know-how

These reasons are important to understand because with each one you change within yourself, the closer you’ll get to unlocking your potential.  To pay off debt is to become truly free, and to do it yourself is to become truly empowered.

It’s really sad that as a society, we gravitate to what appears to be the quick-and-easy methods.  The quick-and-easy method requires no discipline, no change in behavior, and teach us nothing—hence the continuous cycle of debt in this country.  Debt consolidation and bankruptcy address the symptoms but not the problem, which is why they do not work.

So if you are ready to do it yourself, by avoiding the mindset and behaviors listed above, you can effectively pay off your debt. Here’s how:

For starters, you must establish a baby emergency fund, so that you have a cushion to fall back on while you aggressively pay down your debt.  Your emergency fund should be at least $1,000.

Once that is in place, you would start what is called the debt snowball.  Why pay outrageous fees to have someone do something for you that you can already do yourself? Where’s the sense in that? You can handle this, but you have to want it.

Put simply, this method says to list your debts from smallest to largest, regardless of the interest rate.  This is somewhat controversial to some because “it is not good math”.  I would love to point something out though—neither is going into debt in the first place. There are emotional and psychological reasons for doing it in this order that you should consider.

I can speak from experience about using this method to eliminate your debt.  It really is worth the effort, and it works every time.

The way I see it, you have two choices. You can either do the work in the beginning or at the end—but the choice is yours. For most of us, the beginning is already gone so we have to stop what we are doing in the middle and create a new beginning–a place that leads to financial freedom!

Your Debt Free Checklist:

• get sick and tired of being sick and tired
• don’t wait…take action
• change your attitude and behaviors
• stop borrowing money
• start a budget
• spend LESS than you make
• find ways to increase your income
• set realistic financial goals
• save at least $1,000 for baby emergency fund
• aggressively eliminate debt (except for house)
• BONDAGE DEBT FREEDOM BABY!!!

Related Posts:

Debt Free Living – It’s Within Your Reach

Debt Free Living – Unlocking Your Potential

Do it Yourself – a Core Part of Self Reliance

Brad Chaffee is the Enemy of Debt, and a regular contributor here at the Self Reliance Exchange. Brad has also become debt free by paying off $26,076.75 in just 20 months. Learn more about Brad by reading his bio. You may also contact him here.

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Categories: personal finance | Tags: do it yourself, pay off debt, paying off debt, self reliance | No Comments »