Get Out of Debt Plan:
A Basic Structure for Your Get Out of Debt Plan
Not sure how to create your get out of debt plan?
Do you feel like you need
help?
This page shows you the basic structure of what every
plan needs to be successful!
Once you learn what the structure is for your plan,
carry on to the step by step
get out of debt plan.
If you haven't already read the page "Things
to Remember While Reducing your Debt", you may want to do that now.
There is great information there and it is a great place to start.
There
are many things to think of when you are working on your plan, and you really have to look at how things will be
different in your life.
Basic Structure for Your "Get Out of Debt Plan"
OK onto the basic structure! There are many different ways to create your
plan, however whatever your plan looks like you have to remember to make your
plan SMART!
SMART is an acronym that stands for:
-
Specific
-
Measurable
-
Attainable
-
Rewarding
-
Timely
Specific
Your plan should be specific and clear! It should answer the questions -
What,
Why and How. What are you going to accomplish (i.e. get out of debt and save
money), Why are you creating this plan to reduce your debt (i.e. to save to buy
a house) and the How are you going to get out of debt - you specific action
steps you are going to take. (pay off Amex first - see more below on the how).
Measurable
You can't manage your plan, or mark your milestones unless your plan is
measurable. For example, you are going to pay off $1000 on your Amex by December
31, 2008. You want to quantify it and set milestones for each part of your plan
so you have something to measure it against. Make sure your criteria for
meeting
your measures is concrete and easy to identify.
Attainable
Make sure that your get out of debt plan is attainable. There is no
point in creating your plan to pay off $30,000 in one year if you only make
$30,000 a year. It doesn't make sense and it will just discourage you. Each time
you attain a milestone it is a success and something to celebrate. It will keep
you motivated!
Rewarding
This is the fun part - the part where you get to celebrate what you have
accomplished. Maybe part of your plan is that when you have paid off each debt
you will treat yourself to a night out. Make it fun and use these rewards as
motivation to reach your milestones in your plan.
Timely
You must set a timeframe for your plan. If you just say "I am going to pay off
my debt" there is no timeframe for you to work within. To be honest that is
where most people fail at creating their plan. Because they don't' know "when"
they are going to pay off their debt, the don't have a framework to work in.
It's like saying "I'm going to lose weight" Instead of "I am going to lose 20
lbs by May 15th, 2008." Chances are the second way of saying it will be reached easier as
there is something to measure it against.
Now that you you know what every your
get out of
debt plan should be SMART - take the next step and check out a
step by step
plan on how to accomplish it!
Spending
Plan
Frustrated with how to make a budget? Create a spending plan instead.
Your Get out of debt plan could be part of your overall money management plan.
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