This program will help you undo financial bondage.
Paying
your debts off starting with the one with the lowest total balance is the best
method for people who need to see quick victories in debt elimination in order
to be motivated to keep going down the road to total debt elimination. After
that bill is paid off, you would move to the next lowest total balance and put
all your discretionary income (after making minimum payments on all other
bills and expenses) toward eliminating that debt. You need to keep doing
this until all your non-mortgage debts are paid off. Also, refuse to take on
more debt in order for your financial situation to turn around and take you
into the land of financial freedom. Some studies have surmised that a far
higher percentage of people stick with debt elimination using this snowball model
because a quick victory or two keeps their excitement and motivation for
financial freedom at a very high level.
The
top-down bill payment method (avalanche) is a mathematically sound way
to pay debts off for those who will remain motivated to become debt-free because
it allows you to minimize (to the lowest possible level) the amount of
finance charges you pay creditors. Using this model, you pay only the minimum
due on each bill except the one with the highest finance charge. Put all extra
discretionary income with the minimum payment for this account each month until
it's paid off. Then the minimum payment you used to pay for this account plus all
extra discretionary income is available to pay down the account with the next
highest finance charge. Continue this process down the ladder of accounts with next
higher percentage finance charges until each creditor is paid off.
If
you have more than one account with the same finance charge and the same or
different outstanding balances, pay off the one with revolving credit that you’ll
be able to use at many different retailers, if absolutely necessary in case of
an emergency. If both accounts let you do this, it doesn’t matter which one you
pay off first. Then, use all of your discretionary income to pay off the one
with the lowest outstanding balance so you can more quickly reduce the number
of creditors you owe.
An
extra step that could help you eliminate debt faster when using either of these
methods is, for debts that would take you more than a year to pay off, to shop
a number of financial institutions to find an account with a finance charge that’s
much lower than what you’re paying now. Make sure it has no pre-payment
penalties and no closing costs or fees that the lower payment will not make up
for within a few months after opening the account. Then, refinance by
transferring the balances on higher interest accounts to this account to give
you a lower payment and finance charge each month. Now, continue to use all
your discretionary income to pay off your next debt. In your budget, replace
the old higher minimum payment with the new lower minimum payment and thank the
Lord for helping you understand the snowball and avalanche debt payment methods
that can help you reach financial freedom much faster than otherwise possible.
Deuteronomy
28:12-14, Proverbs 22:7, Luke 16:8, Romans 13:8
Please
pray for this ministry and email questions to parlor@ameritech.net and share the links below with others who need guidance.
May the LORD bless you richly as you follow His plan!
Share https://kminfo.org/ministries/financial-freedom
weekly with family and
friends so these bondage-breaking articles and other financial information can
help them gain helpful insight! @everyone
The
book at the link below provides principles and practical steps that help you
use the Power to Get Wealth. By 1992, we had $135,000 of debt and
a negative $35,000 net worth. Financial bondage and turmoil led me to seek
principles and a process for employing good stewardship. As a result, we became
constructively debt-free in 1998, mortgage free January 2004, millionaires in
2012, multi-millionaires shortly thereafter, and retired in 2018 in my
mid-fifties from public servant jobs while giving abundantly to fund the gospel
of our LORD Jesus Christ. The same power is available to you!
You can find books authored by Randy and
Karen Parlor at www.Amazon.com.
You can also connect with
Randy Parlor on Facebook, Twitter, Linkedin, Instagram, Google Blogger,
WordPress, Pinterest, TikTok, Tumbler, and You Tube.
No comments:
Post a Comment