UPDATE: 8/20/2012 We received feedback that readers are seeing links in this post suggesting people take on new debt. We suggest that readers block pop-up ads on their browser. Practips DOES NOT endorse any ad that encourages the public to engage in, or otherwise participate in gaining new household debt.
Is debt getting you down? Are you having trouble making ends meet and wish you could get ahead on your bills? Let us help you make sense of your debt and how to eliminate it. Follow our new blog series on debt and get your house in order using the Practips Debt House.
To get started, make a list of all your borrowed debt -- vehicles, student loans, credit cards, home equity loans/lines, and home mortgage. List them from lowest balance to highest balance. Then, beginning at the bottom of the Debt House, work your way to the top one level at a time.
For the purpose of demonstration, we will show a simplified example of a family's debt. During our blog series, you will learn how this family pays their debt and breaks free from the bondage of borrowing.
Jones Household Debt
$ 1,000 Credit card #1
$ 4,000 Credit card #2
$20,000 Home equity loan
$100,000 Home mortgage
$140,000 TOTAL HOUSEHOLD DEBT
The Jones family begins with their smallest debt (credit card #1). Their minimum payment is $30, but they will work hard to make a much higher payment. Mr. Jones decides he can make a little extra money by doing yard work. They decide to make payments of $200 and get the credit card paid off in a little over 5 months. They can now move on to the next bill.
Our next post in this series will demonstrate how this family proceeds from paying off small balance debt and medium balance debt. You can subscribe to this series, and all Practips blog posts, by entering your email address at the top of the right side bar----->.
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Practips Debt House by Becky Reckelhoff is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License