Author: financenewstoday.com

The Rollover Method To Living Debt Free
The concept of debt came about some 50 years ago. The concept of credit was created as a marketing tool by companies that wanted to sell products to customers on affordable terms. The message of credit is “Enjoy now and pay later.”

Credit itself is not bad. But when you buy everything with credit, you could

be on the road to disaster. 70% of all households live paycheck to paycheck. It takes a lot of discipline to live a debt free lifestyle.

Think of living a debt free lifestyle as a financial diet. Much like a food diet, it can be painful to fight the urges to spend money in the beginning. But as you follow the steps outlined here and you see the burden of debt begin to melt away, you will love the change.

Establish an emergency fund.
This is the most important step in a debt free plan. Accumulate a $1000.00 emergency fund or 5% of your annual income. To do this you may have to make some sacrifices for a small time period. This may seem like a tough thing to do, especially if you are living paycheck to paycheck, but it is possible. It may require cutting out some things that you don’t absolutely need.

Little things like carrying a bag lunch to work verses eating out everyday, carpooling to work to conserve gas or passing on the $8 latte from Starbucks. The average family in America spends $500-$1500 per month on entertainment and leisure activities. The funds are there but you have to make the decision to do it.

Attacking the Debt Monster.
Start by sorting all your debts (except your house) by dollar amount. Start with the smallest debt, pay as much as you can afford while continuing to pay the minimum payment on your other debts.

Also, no matter what pay your bills on time. If not, the late charges, over the limit fees, etc. will quickly eat you alive. If you are having trouble doing this, simply call your creditors, many of them will change your due date to fit your needs. You can also take this opportunity to try and renegotiate your interest rate. Many companies will lower your rate if you ask them to. Many will lower their rate if they feel they may loss the account to another company.

Start Small
Start with by paying off your smallest debt first. Pour all your extra efforts into paying off your smallest bill first. Once you accomplish this, then take all the money you were paying on that bill and add it to the minimum payment you have been making on the next smallest bill. And continue this process until all your bills are paid off.

To see the rollover method in action try our Accelerated Debt Payoff Calculator. This calculator allows you to see how much time and money you could save by paying off your debts using the "rollover" method. Using the rollover method, as each smaller debt is paid off, the freed-up payment amount is then applied to the next larger debt, and so on until all debts are paid off. As you are about to see, the rollover method can save you a ton of money in interest charges, and get you debt free in a very short period of time.

If you follow this plan, you will see your debt decrease. It works if you have 3 bills or 10 different bills. But you must be disciplined. You have to attack your debt if you want to live a debt free lifestyle.

You have to look in the mirror and ask yourself, “What am I willing to do to get out of debt?” It may mean having the willingness to live off rice and beans for a while to save money. It may mean getting a second, or even third job to earn money to payoff your debt. It may mean selling your new car and buying a less expensive used car or selling some of your personal belongings that are just sitting around. Success in personal finance doesn’t have to be glamorous, in fact for most cases those that are extremely successful live a very frugal life. The sacrifice will be worth it in the long run.