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Hints on finding extra money.
1. If
you eat out for lunch every day, you will spend about
$50.00 a week, or $200.00 a month. Take your lunch 3
days a week. Savings----approximately $120.00
2.
Do not go to the grocery store when you are hungry. You
will buy more than you need. Always make your list out
before you go, and do not impulse buy. Savings----$35.00
3. Utilities. Turn the thermostat up 3 degrees
in the summer and down 3 degrees in the winter. Use long
distance during non peak hours. Watch the water
consumtion. Savings----$50.00
4. Car
maintenance. Change your own oil and do routine
maintenance yourself if you can. Savings-----$20.00
5. Mow your own lawn. Savings-------40.00
6. Evaluate your membership in private clubs,
Rotary, Kiwanis, Health Clubs, Golf, Fishing and other
sports. Remember when you get out of debt, their will be
plenty of time and money for those things.
Savings----$50.00
7. Cancel magazine
subscriptions. Cancel unneeded computer services.
Monitor your cost of movie rentals. Go to the early
movie on the matinee prices. Savings---$40.00
8.
Stop smoking. Savings----$100.00
9. Do not buy
credit life insurance on your debt. It is very high, and
you can get a better policy from your insurance man.
Savings-----$50.00
10. Never buy a new car
again. They lose several thousand dollars in value when
they go out the door of the dealership.
Put your
thinking cap on and determine how much money you have to
apply toward your debt. Amounts above are estimates
only.
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OK. We have built the snowman, and got the
rock salt. Let's start melting this big fellow.
Your remember our first debt was $500.00 and the
payment was $25.00 per month. Now let me show you how to
calculate your debt freedom date. Place these dates
beside your snowman, and watch him melt away.
Let's assume we have $200.00 worth of "rock
salt" to apply toward your debts. That means that Mr.
Visa is paid $225.00 per month which is $200.00 rock
salt and $25.00 regular payment. In three months, he is
melted.
Gone forever. Don't cheat. Cut that
little baby up and throw it away.
OK now.
Radical change. We do not go out and get a new debt, but
we apply that $225.00 to the Master Card along with the
$40.00 regular monthly payment and in about 4 months it
is paid off. In figuring these amounts you can look at
your old bills and determine how much interest the
lender is adding each month.
Ok, now the
snowball is rolling. Two debts gone, the rock salt is
still working, but staying with the snow principle, we
now want to keep the snowball rolling. It will get
bigger and bigger.
Now let's apply the $265.00
along with the $65.00 payment to the furniture debt.
$330 will pay off that $1250 debt in about four months.
Wow, ten months and 3 debts are history. $130.00
per month in mostly interest payment are in our control
again. We are getting somewhere and getting excited.
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Now let's attack the
wife's car payment. The snowball is now $330.00
plus the $250.00 regular payment. That gives us
$580.00 to pay off that $4200 debt, which is a
little smaller now, ten months after we started.
So in about seven months it is paid off. Wow!
Now to the mister's car. $580.00 plus the
regular payment of $250.00 gives you $830.00
toward that big old beast. Balance now is about
$8500.00 and in about one year it will be paid
off.
Break out the party horns. Take the
kids out for a Happy Meal. Two and one half years
and all the debt is gone except the house. Now be
sure and read the page about home mortgages, and
how the mortgage companies are ripping you off. It
will blow you away.
Ok, $830.00 to apply
to the house. Let's say you had been living there
one year when you started this program. That means
you have 29 years left to pay on it. Now it is two
and one half years later, so you still have 318
payments left. Twenty six and a half years. Now
watch what happens when the same principle
continues.
Let'assume your house loan was
$95,000 8.5%, thirty year loan. Your payment of
principal and interest is $730.47 and taxes and
insurance gives you a total house payment of
$900.00 Now you have 26.5 years left on the loan,
and you will have paid back $265,944 in thirty
years on that loan.
Let's now continue our
plan. Take the $830.00 and apply it to your $900
and make $1730.00 a month payment on your home.
Payoff will be in 80 months or 6.5 years. You will
have paid back $124,763.00 and saved yourself
$141,181 dollars in interest.
If you do
not have a mortgage loan calculator, just go to
any seach engine and type amortization schedule,
and several will pop up, so you can calculate your
own home loan.
Debt
Free!
It took us 112 months in
this illustration, or just a little over 9 years.
That gives you a little perspective when you think
it would have taken you thirty years to pay off
that home. Most folks move every seven years, and
start the pain all over again.
Investing for the
Future
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