North Americans are carrying large amounts of debt, yet many aren’t even sure exactly how much they are carrying. It is scary to be in debt, and adding up all the debt can feel far too overwhelming. But when you use a debt payoff planner, it can help you organize your debt and get it paid off sooner.
If you avoid your debt, you need to create your debt repayment plan. A debt payoff planner can help you with that.
The hardest step is facing the debt amount that you are carrying. Adding up all the debt can feel so scary that most people want to avoid that first step. But avoiding the debt and sweeping it under the rug will only exacerbate the problem because you’ll just be creating a bigger pile of debt when you are in avoidance.
Coming out of avoidance and facing the problem head-on is the most challenging yet most effective way of tackling the debt.
Debt payoff tracker
A debt payoff tracker is a tool that you can use to simplify the debt payoff process. You list all the debt you owe, how much and at what interest rate, your monthly payment amounts, and it will calculate the expected date of complete payoff.
Debt payoff calculators are valuable tools, and you can use them for multiple credit cards and loans.
Register for the Debt Repayment Calculator Mini-Course if you have balances owing on multiple credit cards and are unsure how to create a debt repayment plan. I will walk you through completing the debt repayment calculator worksheet. There is a video recording of completing the workbook, and it is easy to follow.
Steps involved in your debt repayment plan:
Collect all the debt you owe
This is the hardest step because you have to face the truth about how much money you owe. It can be a complicated truth to face, but this is the hardest step. Once you know how much money you owe, you can get into action and start paying off the debt.
Know how much you owe, the interest rate, and minimum payments
When you have all the information of outstanding balances, the interest rate you are being charged, and your minimum payments per month, this information helps you get organized. You will need this for your debt payoff planner.
Find a debt payoff planner
Find a debt payoff planner that you can use. You can use the tool I put together to help clients unsure how to create a debt repayment plan. Register for the Debt Repayment Calculator Mini-Course, where I walk you through the steps of completing the debt repayment calculator worksheet. There is a video recording of completing the workbook, and it is easy to follow.
Enter your required data
Complete the required cells that need the information to generate a debt repayment plan for you.
Determine how much you can afford to pay each month
When you carry debt, you are weighed down with interest rate charges. It makes sense to pay off the debt with the highest interest rate first then go in that order. The idea is to minimize the interest payments because that is wasted money. Debt is expensive to carry, and the faster you pay it off, the better it will be.
Follow the plan
Check-in regularly and ensure you are keeping to the plan. It can be tempting to spend money on other things, but remember that you are paying a lot in interest expense to carry debt. The longer it takes you to pay off your debt, the more money you waste on interest expenses.
Add more when you can
To expedite the process, you should be adding more money to your debt repayment plan as you can. You can find ways to bring in more money to put towards that debt, whether through a side hustle, selling items you no longer use or saving extra money throughout the month.
Once you pay off the debt, you are no longer a prisoner of that debt.
The bottom line is debt is expensive to carry, but it can also weigh you down emotionally. Debt can cause stress and feel suffocating. Having a debt repayment plan and using a debt payoff planner helps alleviate the stress because you know what you need to do to get out of debt.
If you have debt and need help with your debt repayment plan, sign up for this Debt Repayment Calculator Mini-Course, where I walk you through the steps of completing the debt repayment calculator worksheet. There is a video recording of completing the workbook, and it is easy to follow.
