3-Step Plan of Attack:
Going for the Payoff
by Beau Henderson
Does your debt seem so big, you don’t even know where to begin?
Or maybe you know what you SHOULD be doing, but still you’re not doing it? You are not alone in this. 
50% of all Americans carry credit card debt
of $1,000 or more.
The time has come to roll up your sleeves, get out the sledge hammer, and work out with some numbers! We’re going to do some serious damage, beginning with the life-changing challenge of DESTROYING OUR DEBT.

What follows is a plan of attack. If you are serious about reducing your debt, the following 3-step plan will absolutely get you started AND keep you going.

We’ll talk about (1) how to begin tackling your debt and the secret to avoiding future debt, (2) how to keep it going by starting with the biggest payoff first. And finally, (3) I’ll outline my simple 7-1-1-1-plan so the action becomes habit!
Step #1: Take a good look at where you stand now.
We have talked about this in the past, but with regards to your debt, it is imperative you have a CLEAR PICTURE of where you stand now. You will need to know exactly how much is coming in and how much is going out every month. If you know your numbers, you won’t be tempted to follow someone’s else’s.

Your creditors, banks, and other financial institutions stand to gain from you over-spending!
It is in their best interest for you to borrow as much as possible, not in yours. By going along with their numbers, you are turning over the power to create your own spending plan, and the success of your financial future as well!  
What this means is that even though you can afford a higher payment, DON’T!
This is the secret to avoiding future debt: instead of spending every penny now, live below your means. Invest the difference in your future and put some of that money to work for you!  
One simple thing to keep in mind here is this:
If you can’t pay as you go, you’re probably going too fast.
It might be the best thing you can do for your finances is to slow down. In a world where people have grown accustomed to spending everything they earn, and borrowing up to 30% beyond that, you can make the choice to keep the bigger picture in mind.

Step #2: Go for the Easy Pay Off!
When it comes to debt, sometimes it can be hard to get started because all together, the problem seems so BIG. A lot of people tell me they don’t know where to start. Here’s the answer:
Go for what will give you the quickest gratification.
Go for the smallest amount of debt first.
This strategy will allow you to accomplish something tangible in the least amount of time. It will also get you in the habit of setting aside a portion of your income every month for debt reduction.

To help keep you motivated, keep the following principle in mind:
If you pay the price now, you won’t have to pay the cost later.
When you are paying off credit cards with high interest rates, you know the interest you are being charged is like water down the drain. Do nothing, and that amount will only continue to grow! The cost later is ALWAYS higher in the future than whatever the price is now. Make the decision to tackle it now before it gets worse. KEEP THE BIGGER PICTURE IN MIND: a healthy financial future.

Once you have one loan taken care of, you can apply that same amount to the next loan, or the next goal, and you will be well on your way toward financial freedom.
Step #3: Stay committed.
You can do this easily by getting into the habit of paying yourself first. This means that a portion of every paycheck goes to you and your future first, before the bills and expenses.
Debt won’t go away unless you pay it off,
and nothing will get saved unless you start now.
So split the difference.
Come up with a formula that works for you. I recommend following a simple 7 -1 -1 -1 rule.

  • 70% for living expenses
  • 10% for short term savings
  • 10% for paying down any outstanding debt
  • 10% for your future

To help you get into the habit of paying yourself first, I suggest taking advantage of automatic deposits.
The most important thing to remember here is that
how much you are saving is not as important
as developing the habit now.
The person who waits until they can set aside $200 a month ends up with nothing at the end of 5 years. Even if at first you can only find $10 a week to set aside, DO IT NOW. This will help you develop the habit, and soon that $10 will become $50.
And remember to reward yourself for your discipline and hard work! Most successful clients build in buckets or automatic accounts to fill up for things like a road trip to see the grandkids, an annual trip to Vegas, or a deep sea fishing trip with the guys.    

Once that debt is gone, the easy begins. You’ll be able to increase your savings without having to change your lifestyle or spend one penny more!  
By making the choice to begin tackling your debt now, you can position yourself for a debt-free future, where you’ll be free to discover your RichLife!
Get a plan, stay committed, and go for the pay off!
I’ll be waiting for you at the finish line.

How much debt have you lost? What is your debt destruction plan of attack? Send us your story or call in to our show! Your example could make the difference for someone achieving their RichLife. Be blessed and live rich!

About Beau Henderson

Beau Henderson is a financial advisor, author, coach, radio personality, and CEO of RichLife Advisors. He has helped over 3,000 clients to not just improve their relationship with money, but to live the life of their dreams.

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