part 2

...Ok, so you should have a spread sheet that looks something like this
Name of debt total balance monthly payment division

School Loan 4000 215 19
loan 5300 275 19
Resort 2683 100 27
credit card 400 15 27
plc 1671 50 33
credit card 750 18 42
credit card 1000 15 67
saturn 12000 353 34
Mortgage 120000 1053 114
mom 12850 25 514

Embarq 100
electric 150
water 45
cell 70
ins 98
food 200
babysitting 240
gas 175
misc 200

Total 3397

his 2120
her 1000
extra 550

Debt reducer

Total Income 3670 273

Now here is the pay off part. Take the "Debt Reducer" amount, $273 and add it to your normal payment on the first bill on your list, so your payment on the school loan this month will be $488. Make all the absolute minimum payments on all your other bills. The second month you will notice after you take off the $488 you only owe $3512, reducing the number of payments down to 16. Repeating this for your second month, now you only owe 3024, reducing your payments down to 14. In just two months you went from having 19 payments down to 14. After 8 months total of this pattern you will only owe $96. You nocked 11 payments off your total and we aren't even discussing the actual interest you saved.

The next month you will be able to pay off your school loan with less than the normal payment. You will add that extra 119 to your Debt Reducer amount and use the new Debt Reducer amount of $392 to add to your second bill on the list. Keep in mind, while you were paying off the first bill the second was still getting money too, just the minimum amount of $275, but that now leaves the bill at only $3100. Add the DR amount to the normal payment and pay $667 for just 4 full payments. After that you will owe only $432

Take your $432 out of the DR amount of $667 and that leaves you with $235 remaining to use on the next bill, which again has continued to decrease as well. You owe $1583 on this and pay on your 12th month in this system $335, bringing the total owed to $1248.

This would be the 13th month in the system now. You will add the $275 minimum payment from bill 2 to your DR amount giving you $856 to add to your bill. One full payment and the next month you will have $564 to put towards the next bill.

Notice the next bill is only $205, so pay the normal $15 and $190 from your DR amount to completely pay off that bill and move on to the next, which you still have $374 left in your DR amount for this month.

Hopefully, you see the pattern now. I have shown in just 14 months, you paid off $12,383, and we didn't talk about the interest you saved on all these bills. Continue with this system until ALL your unwanted bills are gone, including the Mortgage. By the time you get to your mortgage you will have a DR amount of $1314 to add to your principle. If you have looked at the actual amount that goes to your principle lately...it isn't much. But, if you could put more than an entire payment to your principle each month, you would knock off 10-20 years of your mortgage, which is all interest...TENS OF THOUSANDS of dollars.

Some of you might be thinking...I don't want to scrimp for that long without a vacation. That is the beauty of this system...you don't have to. Just budget in your vacation to your plan. ...i.e. use your DR amount for a couple months to save up for it, use it, then continue on with the system where you left off.

When we first started this system we were going to be to the car payment by May of this year, but...things happened, we did some other stuff and we will not reach the car payment till August now. But, we are still on the system and still plan on having the house paid off in less than 10 years, no matter what we decide to do for fun in the mean time.

Hope this helps you. If you want any more advice like this feel free to visit my site http://www.learneverythingfree.com and sign up for my newsletter and you will receive all my new articles when they are posted.