Let's start simply. You owe $1500 on a credit card that has 20% interest on it. You were late a couple times and they call you every month now to nag about the payment days before it's even due. You want it paid off quickly.
Cancel the card or at least destroy your own card so you can't add to it.
You decide you can buckle down and pay it off in a year.
With interest, it will be just over $1800 to pay off. Or $150 a month.
You were already making the minimum payment of $40 a month, so you need to ramp that up $110 a month.

How? If you are already squeaking by, where do you pull another $100 from? Thin air?

No. You take your cutbacks and apply them.
Stop buying anything not on your shopping list.
Consider further cutbacks:
If you have a cell phone, cut off your house phone.
Cancel your satellite TV and get Netflix.
Sell things you have that you don't need or don't use.
Skip the vacation this year.

Apply anything extra that you can toward the debt, money recieved as a bonus or a gift, tax refunds, rebates from something you bought THAT YOU NEEDED.

When it's gone, it's gone, it won't grow back if you don't feed it and you will have $150 a month free and clear and extra!

Bigger issues than $1500? Closer to $5,000 or $15,000 or more?

List out what you owe on from most to least.


Medical (eye doctor): owe $650
Credit Card one: owe $2,000
Medical (orthodontist): owe $2,500
Credit Card Two: owe $3,500
Vechicle: owe $7,000
House: owe $45,000

You are paying $60 a month to the eye doc, $200 on card 1, $150 to the orthodontist, $220 on card 2, $350 on the car and $800 on the house.

First, make only the minimum payment on everything but the lowest bill. Put all you can on it, aiming for a double payment. A $120 a month payment will clear that debt in just over 5 months.

Now you have $120 more to add to the $200 for card 1. With a payment of $320, that will be paid off in 6 months!

In less than one year, you are down to only owing on 4 things, and those balances are getting a little lower each month!

Now you have $320 to put toward your next debt.

The braces will be paid off in 2 months.
Math-at the start, you owed $2500 on the braces, after the past 11 months making payments while getting the other debt paid down, that amount is down to $850 because 11x$150=$1650 and $2500-$1650=$850. $320+the $150 you have been paying=$470, which means the orthdontist will be paid off in 2 months, with money left over, assuming 0-2% interest each month, which is the norm for orthdontics.

If you put some of your extra money-gift money, work bonus, tax returns and so on on the debt, you could have easily paid off the first 3 items in the first year. In the above example, it only took 13 months!

Now, you have $470 a month to work with!
Let's assume 15% interest on the credit card and that you made minimum payments for the previous 12 months. You now owe...about $2900.
The $470+the $220 you are already paying is $690. You can have the card paid off in 5 months.

After a year and a half, you only owe the house and the car. The $690 from the other payments plus the $350 you already pay= $1040. You can have your car paid off in 6 months.

Now, it's been 2 years since you started. You now owe about $39,000 on your house. If you take all of the payments you were making and put them on the house plus the house payment, it would be $1840 a month. Your house would be paid for in...2 years. (If you still owe $139,000, it would take only 6 years to totally pay off your house.)

4 years to debt free. Where were you finacially 4 years ago? Do you see where you can be 4 years from NOW?

If you put that in the bank once you are debt free, you could pay cash for an $18,400 brand new car in 10 months.
Or, you could pay cash for 2 weeks at Disney World in 3 months.
Disney World for 2 weeks every 3 months. Even *I* could get my fill in a year...or two!
Or you could fly to Italy and rent a house for 2 weeks in just 6 months, wait a full year, stay a whole month. Heck, run on over and take a peek at Greece while you are so close!

Even if you just pay down to the house being your only payment, that's nearly $700 a month you will have free and clear to blow or save or cash out as $1 bills and roll naked in.

This is money you are handing over to someone else to use each month. This is money you could be using to do anything you want to. This is YOUR money.

If you put the extra money that comes in through the year on the debt, it would be gone even faster. Or, put it in savings so you don't have to pull out the credit card for a car or home repair.