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through this process, you help all of us to live in a better society.
Step 1. Create a Debt Elimination Box
List all your consumer debt. Like your Financial Baseline items, this should be done electronically so you can keep
track easily. This list should include all of your credit cards, charge accounts, any high-interest loans that are not
against an asset, and other outstanding credit or liabilities. The list should include (1) the name of the creditor, (2)
the amount you owe, (3) minimum monthly payments, and (4) the interest rate.
On our Web site, www.liveoutloud.com , we have a debt calculator that allows you to insert these numbers and
easily create these calculations.
Step 2. The Factoring Number
To fill in the last column, the factoring number, the following simple calculation is necessary. Take the number in
column 2, which is the amount of the debt, and divide that number by the number in column 3, which is the
minimum monthly payment required. For example, if you owe $7,000 on your credit card and the minimum monthly
payment is $200, your factoring number would be 35. Fill in the factoring number for each item on your consumer
debt list.
Step 3. Priority Payoff Box
On a new list, take the debt with the lowest factoring number and put it at the top. This debt is the first priority
payoff. Continue to list the debt in order of the factoring number, with the debt with the lowest factoring number
appearing in first place, the debt with the second lowest factoring number in second place, all the way down to the
debt with the highest factoring number listed at the bottom.
Step 4. The Jump-Start Allocation
In addition to the minimum payments required, you are going to take $200 from your current spending and allocate
this to your debt elimination plan. This amount, about $7 a day, will greatly accelerate your debt elimination plan.
Don’t scream. This is going to be easier than you think. And once you put together your detailed Financial Baseline
