This is another guest post from Joe Plemon from Plemon Financial Coaching. Joe is the Money Columnist for The Southern Illinoisan.

Chance and Kimberly Morrow, both 40, were buried in $59,000 credit card debt with a $35,000 income.  A financial planner told them it would take them forty years to get out of debt, but they are debt free after only four years.

Two years ago, Jaime Morgan, 27, felt overwhelmed by her $13,000 debt.  Today it is all gone and she is making huge payments on her house.

Alan and Lonnie Cluff, ages 48 and 47, once had $95,000 in consumer debt. Today, nine years later, they have not only paid off their debt, but have also paid off their house.

Did these people win lotteries?  No.  Did they come into an inheritance or other windfall?  No again. Did they use some “magic” formula?  Still no.  No smoke and mirrors.  No magic.  They shed their debt by a combination of sacrifice, hard work and planning.  You can do it too if you follow these same basic steps:

How to Get Started and Stay on Course

1.    Can-do attitude.

You become what you believe.  If you believe that you will always have debt, you will indeed always have debt.  Listen to yourself.  If you sound like Winnie the Pooh’s friend Eeyore, it is time to clear the whine from your mind and start believing the truth: you can do it.

2.    Visualize your goal.

Allow yourself to imagine what your debt free life will be like.  No payments….no more money fights…being in control…less stress… more freedom…having money to help others… retirement with dignity.  The more clearly you can visualize your goals, the better you will be able to keep on course when the unexpected bumps come your way.

3.    Sacrifice.

Chance Morrow’s $35,000 income didn’t give him the intensity he wanted, so he volunteered for all the overtime he could get.  Then he kicked it up another notch and started delivering pizzas five nights a week.  He knew this level of commitment was not forever, but he and Kimberly gained momentum as they saw their debt plunge each month.  You need to ask yourself: “What sacrifices am I willing to make?”

4.    Agreement.

If you are married, it is essential that both of you are on the same page.  Working together will make your marriage stronger;  trying this alone will frustrate both of you.  If you are single, find a friend who will keep you accountable.  Even better find a friend who is doing the same thing and keep each other accountable.

5.    Focus.

Most people make no progress because they are saving for kid’s college, saving for retirement, saving for Christmas, trying to pay extra on their house and also get out of debt.  Focus means temporarily stopping everything else and concentrating on your debt.  Once the debt is gone, you will have a great cash flow to accomplish your other goals.

6.    Plan.

Intensity without direction creates chaos.  It is essential that you prepare a budget so you can project your time line.  Most people with a plan can pay off all debt other than their house in 18-24 months.  Wouldn’t you be more excited about getting started if you can know that the end is in sight?

7.    Debt snowball.


The debt snowball will help you keep your focus by giving you encouragement throughout the process.  Here is how it works:  List all your debts from smallest to largest and stick the list on your refrigerator.  Pay minimum payments on all but the smallest one and pour your energy into paying it off.  When it disappears, draw a huge red line through that debt on your list and add that payment amount to the minimum payment of the next one on your list.  When it is gone, add another huge red line on your list and continue on to the next one.  As these victories pile up, you will gain momentum and enthusiasm.

8.    Read.

Great non-fiction “how-to” books will help you maintain that enthusiasm.  I highly recommend Dave Ramsey’s New York Times best seller “The Total Money Makeover”, which explains the baby steps of becoming debt free, but is full of personal stories of others who have defeated debt.

9.    Be weird.

Your friends and family probably won’t understand your new behavior.  When they notice that you have sold your expensive car or that you aren’t eating out as often, they may ask what kind of kool aid you have been drinking.  Simply smile and explain that because “normal” is broke in America, you have decided that you would rather be weird.  Each time this happens, you will further cement your new values into your mind and emotions.  And who knows?  You may just encourage others to do the same.

10.    Go for it.

Waiting for the perfect time is simply a form of procrastination.  The best time to get started is now.  2009 will be forever anchored in your memory as the year you changed your life forever by getting radical about your debt.


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Comments | 3 Responses

  1. says

    Out of anything on this list Sacrifice is the most important and most difficult. It is also one of the last things that people do when it comes to reducing their debt. If you are really serious about reducing your debt, then sacrifice is going to be part of your plan.

  2. says

    I have spoken to a few friends recently who are still struggling with massive pos-secondary debts and came across this post after reading a few blogs. I really like the concept of being weird and making some drastic changes to cut into debt. It can be extremely difficult to make a dent, but by making huge and maybe weird changes, some people may start to see those piles of debt getting drastically smaller.

  3. says

    I have a problem with focus, just when I thought I had it all together some other expense comes up and I have to figure out where I’m coming up with extra money for that. I do love the debt snowball, I will say it works great. I love being able to put red lines through the debts I pay off!

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