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2010 New Year’s Resolution: Debt Reduction

January 1, 2010

This year, I am putting my budget on a diet. Forget me! It’s my credit card statements that seem to keep growing bigger and bigger every month and its time to take some drastic measures.

By clipping coupons, cutting back on my Starbucks habit and dining in more (along with a few other non-life-altering measures) I have determined that between me and my husband, we should be able to allocate $1,000 each month to paying off debt.

I have four credit cards with varying limits and balances. In total, I have $19,000 in credit card debt – shudder… It is time to cut the spending and get out of debt! Now, I am by no means a financial expert – clearly, look at how much debt I have – but I’ve come up with a method to keep me motivated to budget and save so I can make regular payments to each credit card. As one who likes instant gratification, I created a spreadsheet and plugged in some numbers for 2010. This allows me to see how much I will have reduced my debt by this time next year if I stick to my payoff schedule.

Payoff_Schedule

As you can see in the spreadsheet, I decided to initially allocate the largest portion of my payments to my cards with the lowest balances so I can pay them off faster. With this method, I’ll clear my first card by March and my second by July. By this time next year, I’ll have reduced my overall credit card debt by 61%. Now THAT’S motivation!

Of course, all of this is dependant on me not adding to the existing balances!

I’ll be reporting back each month on my progress and whether or not I am keeping up with my payment schedule to help me stay in check! If you like my method for motivation and want to reduce some of your own debt, please feel free to use my template. Whether you have $1,000 or $100 each month to pay off debt, every bit helps.

What’s your resolution and how will you keep yourself motivated?

My 2010 New Year’s Resolution: Debt Reduction

This year, I am putting my budget on a diet. Forget me! It’s my credit card statements that seem to keep growing bigger and bigger every month and its time to take some drastic measures.

By clipping coupons, cutting back on my Starbucks habit and dining in more (along with a few other non-life-altering measures) I have determined that between me and my husband, we should be able to allocate $1,000 each month to paying off debt.

I have four credit cards with varying limits and balances. In total, I have $19,000 in credit card debt – shudder… It is time to cut the spending and get out of debt! Now, I am by no means a financial expert – clearly, look at how much debt I have – but I’ve come up with a method to keep me motivated to budget and save so I can make regular payments to each credit card. As one who likes instant gratification, I created an Excel spreadsheet and plugged in some numbers for 2010. This allows me to see how much I will have reduced my debt by this time next year if I stick to a payoff schedule.

As you can see in the spreadsheet, I decided to initially allocate the largest portion of my payments to my cards with the lowest balances, so I can pay them off faster. With this method, I’ll clear my first card by March and my second by July. By this time next year, I’ll have reduced my overall credit card debt by 61%. Now THAT’S motivation!

Of course, all of this is dependant on me not adding to the existing balances!

I’ll be reporting back each month on my progress and whether or not I am keeping up with my payment schedule to help me stay in check! If you like my method for motivation and want to reduce some of your own debt, please feel free to use my template. Whether you have $1,000 or $100 each month to pay off debt, every bit helps.

What’s your resolution and how will you keep yourself motivated?

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