Monthly Budget Planning in 6 Easy Steps - Step 5

The FIFTH step is to pay down the debt while enjoying life.

Knowing how much money is coming in and where your hard earned money is going puts you in the drivers' seat.

• See which credit cards or loans have the highest interest rate and start paying more each month.
• When you pay one credit card or loan off, apply that payment to the next highest interest rate loan.
• Pay your bills on time and ALWAYS pay more than the minimum required payment.
• See if you can feasibly transfer a balance to another credit card with a lower interest rate.
• If you do this, make sure that the amount transferred as well as the transfer fee does not take you over the limit.
• Do not use this newly transferred-to credit card for anything else.  At least until it has a ZERO balance.
• Pay your bills online through your bank.  Your bank ensures that the payment is made on the date you request and that it doesn't get lost in the mail.
• Check your statement to make sure that the amount or date of payment has not changed.
• Make sure you have enough money in the account to pay this bill.
• Stop using your credit cards.
• Think of credit cards as emergency use only!

This is one of the easier steps but one that is tough to maintain discipline.  The desire to use a credit card this is now paid in full is tough to resist, also is the desire to spend the money now available after paying off a credit card.  Pretend that money and zero-balance credit does not exist.  Cut up the card, if you haven't already and re-allocate the money to the next card or debt.

P.S., Please seek a financial adviser for in-depth analysis of your particular situation.  We are not financial advisers but have been in similar situations and want to pass along our experiences.

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