Now that you have the credit reports (www.annualcreditreport.com) and they are compiled into a list – it is time to get going. It is time to enact your plan.
Your plan is your strategy to move forward on each debt and have them removed or pay them off. This is never easy, but getting out of debt requires hard work. Remember, we are looking at this as a crisis and/or a major illness that has to be fought. You have to be aggressive or you will continue to struggle financially.
Now when I say aggressive I mean just exactly opposite of how some people pay their rent – slow and steady! You are going to attract this like a freight train head on. If not, it will be like paying your rent twenty years from now – still trying to get it done.
How long has it been since you have paid on some of this debt? On your list of debts (the one you created with the credit reports) create a column next to each debt and write the date of your last payment to them. It may have recent or on schedule and, if so, mark that one as “current”.
For those that you have not paid on in some time, mark that date that you believe you last paid this creditor. Some may show up on the credit report as indicating that it is in collections. If so, mark “collections” in the column beside those instances.
Finally, add a column (if you have not done so already) that shows exactly what you owe to each one. This may be what you believe that you owe them or what they think you owe them and is shown on your most recent bill or credit report.
In the previous email, we described the life threatening illness.
If you remember, you went to the doctor and she listed what what was wrong and what the game plan was to get you healthy and on the right path. This debt document that you have now created is the list of your debt illness and what has to be tackled.
Now it is time to tackle.
If you created your list on a spreadsheet the next step will be a little easier. If you did yours on paper, you may need to prioritize in order using 1,2,3…
Sort your list, on the total amount you owe, and list the smallest amounts at the top. Look at that – you have a list of all the things you owe on.
Is it unbelievable? To me, if it has anything it has too much and should be unbelievable. As you can see, you have a mountain to overcome, but you can overcome it if that is your vision.
I can remember back when I was a teenager. My dad let me stay home from school one day yo help him build a fence. Had I known what I was getting into, I would have went to school. Does your debt picture make you feel that way after you now see it?
It was a nice day, warm and sunny. As we were digging the post holes for the fence we encountered an obstacle – rock, solid rock.
This farm did not have rocks it had one big rock and it was the size of the farm or at least that is how I felt. When we hit the rock and could go no farther, my dad pulled out this spear like tool that was designed to bust the rock and allowed you to dig it out. It was easy, so I thought, just throw the spear in the hole and watch the rock bust. No way! It would just bounce right back.
My dad stepped in, grabbed the spear and as he began throwing it it kept saying “you have to get mad at it..”. Guess what? It worked! The rock began to break into manageable pieces to be dug out.
Your debt is no different. Your list now shows the manageable pieces. You need to attack each one like you are mad, and you should be, so that we can get it taken care of.
Here is the plan:
- Stay current on all those you are current with – do not get
behind.
- For right now, ignore the ones that you are not current on. Not forever, but long enough to get the others out of your life.
- Each month, add as much money as you can to that smallest one until it is paid off.
- Once the first one is paid off, you move to the second one. Now add the minimum amount of the first one that is now paid and all you can add in extra money.
In this period, you will be more aggressive with the more money you can bring in and add to the plan. Do not be afraid to work more overtime or get a part-time job – every little bit helps and gets you on the right path.
Finally, take this printed plan and put it where you see it, if not daily, weekly. Let this picture help in your motivation to be aggressive. How quick can you begin seeing things scratched off.
Your plan is worthless unless you work it and work it aggressively.
