Most people who are in debt have no idea how much their total debt number actually is.
The truth will set you free!
The best thing you can do towards going DEBT FREE is to grab a notebook and dedicate 1 page to each piece of debt in your life. Write down the balance owed on that debt on the first of every month. 1 page for your mortgage, 1 page for your car loan, 1 page for each credit card… each month update each page.
Once you have a page dedicated to each debt item add them all up on your DEBT TOTALS page. I can look at my DEBT TOTALS page and it shows my total debt number 1 year ago, 6 months ago, and so on.
Now you know what your total debt amount is, and as you pay it down each month you can track your progress.
Don’t keep a spreadsheet on your computer, actually WRITE this stuff down. A spreadsheet can be ignored or deleted with one keystroke, there is something more tangible about having to write down your debt total each month.
If you make all your income from a job consider joining the LIFE community as a business owner. This will allow you to deduct certain business costs (like mileage) from your tax return. Even owning a very small business can help the typical employee save at least $2,000 per year in taxes (depending on your income).
Call a local CPA, ask them about the tax advantages of business ownership. Even if you save $1,000 per year in taxes you can use that money to reduce your debt.
Click on the Life Community link at the top of this page to learn more about that.
If your debt is out of control start with my notebook idea. In Darren Hardy’s book Compound Effect he talks about the power of tracking the things in our lives that we want to improve.
We use the speedometer on our car to make sure we don’t exceed the speed limit, the same goes for your finances. Track it first, then you can start to change it. Your total DEBT number might feel overwhelming at first, but if you can reduce it by a couple hundred bucks each month you’ll see progress over the next year.
I was shocked when I wrote down my debt totals back in 2014, today that debt is almost gone, all because I started by tracking it every month in a little $3 green notebook
There is one sure-fire guarantee here, if you don’t watch your debt it will continue to grow.
Hope that helps!
Benjamin T. Alexander
February 13 . 2017