Pay Off Debt – Part 02

In this series of posts, I want to equip you to become debt-free!   Jenn and I became debt-free in 14 months by following this process, and I can tell you this – there is NOTHING like living life without the trappings of debt!

Let's review the first step.

Step 1 – Understand WHY you want to be debt-free!  If you don't have a clear understanding of why you want to become debt-free, you will have a very tough time sticking to this effort.  When you know WHY, you are able to stand firm against the temptation to acquire more debt.

I hope that you have taken the time to write out your hopes/plans/dreams for your life.  Again, I cannot overstate the importance of writing this out on paper!

Step 2 – List your debts

During financial counseling sessions, it is a guarantee for any person who has debt that I will calculate their debt freedom date.  You should see people's reactions as I put together a list of their debt!  Their reactions relay to me the true facts of debt.  Here are some very common reactions that I see/hear.

  • Hiding their eyes
  • "Oh no!"
  • "I've never added it up."
  • "This is scary."
  • Moving to a defensive position as if to guard themselves against the debt
  • Turn their head so they don't have to look at the debt total

I KNOW that it can be scary to total up debt.  The mere fact that it is so scary tells me two things:

1.  People do not like debt.

2.  People have not been paying attention to their finances and do not have a well-defined plan for their life.  Otherwise, they would not have incurred most of the debt.  It is literally ROBBING them of their financial future!

Here is what I say to them – "If you don't know how many heads the dragon has or how large the dragon is, how can you effectively defeat it?"

It is time to slay the dragon.  Use THIS FORM to prepare a well-organized list of your debt.

Question of the Day:  Why is it so scary to total up debt?


Read Joe's recent blog posts 

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  1. ANON on September 11, 2007 at 11:59 am

    How do you feel about settling with creditors.My husband and I have an appt with you 10/1/07 and his credit card debt is up to $70,000.00 including the $28,000.00 2nd mortgage he has.Three of his cards have interest rates of 20/28.99% and we cannot afford the payments.Hes already working two jobs and he financially cannot make it.I work full time too and I suggested trying to settle with the creditors or go thru a debt consolidation.We also have our house for sale.I just wanted your opinion on this horrific situation

  2. » Pay Off Debt - Part 03 on November 6, 2007 at 6:37 am

    […] Step 2 – List your debts  If you do not know who you owe and how much you owe them, it becomes very difficult to put together a winning plan!  You can print out a debt list sheet HERE. […]

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