# How long until you are debt-free?

It is simple to calculate your debt-freedom date! Here is how you do it.

1) List all of your debts
– include each debt’s name (Home Depot, Victoria’s Secret, etc.), the debt’s balance, and the monthly payment
2) Sum up all of the outstanding debt balances to obtain the Total Debt Owed
3) Sum up all of the monthly payments to obtain the Total Monthly Payments
4) Divide the Total Debt Owed by Total Monthly Payments
– this will provide you the number of months until you are debt-free!!!

Look at the example below. You can see that the Total Debt Owed is equal to \$16,650. The Total Monthly Payments have also been totaled and are equal to \$505. Dividing the Total Debt Owed by the Total Monthly Payments equals 33 months. In this example, the family’s Debt-Freedom Date is December 2008!!!

A couple of notes:
1) This assumes that you are no longer acquiring debt. Just say NO! 🙂
2) This does not account for interest. However, it also does not account for pay raises, bonuses, tax refunds, money from selling something, or money freed up by better budgeting. Trust me. If you go crazy on this thing, it will take you 50% to 75% of this time to become debt-free. It really depends a lot on how much you really want to become debt-free and how much you are willing to give up to achieve financial freedom.

How long until you are debt-free? What would you do with the \$505 each month if you were not paying debt with it?

Make it happen!