# How to Eliminate \$682 Per Month in Debt

 By: Justin V. Cecil
 We are going to go through this step-by-step with a hypothetical scenario. Joe Smith will be our hypothetical debt-ridden participant. We will show Joe step-bystep how to eliminate his debt so just imagine you are in Joe's shoes and applythe same techniques.Joe's efficient budgeting has saved him an extra \$50 per month. He has these debts at these monthly payments:Debt 1 - \$800 @ \$90 per monthDebt 2 - \$1,200 @ \$110 per monthDebt 3 - \$5,300 @ \$202 per monthDebt 4 - \$10,000 @ \$280 per monthJoe will pay the minimum balances on all his debts except the smallest (Debt 1).He will use all of his extra money (\$50 per month) to payoff his smallest debt first(regardless of interest rates). Thus, Joe will be paying \$140 per month on Debt 1(\$90 original payment + \$50 additional from budgeting). Joe will continue payingthe minimum payments on Debts 2, 3 and 4.&bull This technique is recommended because Joe can quickly payoff thesmallest debt of \$800. Once he does, Joe will feel GREAT because hehas accomplished his first step to debt freedom. This will give Joe theconfidence and drive to continue paying off all his debt.&bull Though not recommended, Joe may be disciplined enough to take on alarger debt balance first which carries a larger interest rate. Joe could goahead and do this, but he needs to be careful not to become discouragedand quit.&bull If Joe had two debts with similar balances, then he should pay off the onewith the highest interest rate first.Joe has paid off Debt 1. He should now use the monthly amount he was payingon Debt 1 and begin eliminating Debt 2 of \$1,200 (which is actually lowerbecause he has continued paying the minimum payment). Here's how it works:&bull Joe will apply \$50 extra from budgeting, plus \$90 from Debt 1, plus theminimum payment of \$110 for Debt 2.&bull Joe will be paying a total of \$250 per month on Debt 2 until it is paid in full.&bull He will continue paying the minimum payments on Debts 3 and 4.Joe has paid off Debt 2. He should now use the monthly amount he was payingon Debts 1 and 2 and begin eliminating Debt 3 of \$5,300 (which is actually lowerbecause he has continued paying the minimum payment). Here's how it works:&bull Joe will apply \$50 extra from budgeting, plus \$90 from Debt 1, plus \$110from Debt 2, plus the minimum payment of \$202 for Debt 3.&bull Joe will be paying a total of \$452 per month on Debt 3 until it is paid in full.&bull Joe will continue paying the minimum payment on Debt 4.Joe has paid off Debt 3. He should now use the monthly amount he was payingon Debts 1, 2 and 3 to begin eliminating Debt 4 of \$10,000 (which is now lowerbecause he has continued paying the minimum payment). Here's how it works:&bull Joe will apply \$50 extra from budgeting, plus \$90 from Debt 1, plus \$110from Debt 2, plus \$202 from Debt 3, plus the minimum payment of \$280for Debt 4.&bull Joe will be paying a total of \$732 per month on Debt 4 until it is paid in full.JOE IS DEBT FREE! He has paid off \$17,300 in debt and now has an extra\$732 per month including:&bull \$50 effective budgeting&bull \$90 Debt 1&bull \$110 Debt 2&bull \$202 Debt 3&bull \$280 Debt 4So what should Joe do with the extra \$732 per month, blow it? No way. Now itis time for Joe to become a millionaire. Visit PeskyDebt dot net to learn how to turn the extra \$732 per month into \$2,594,263.39 over time.