Money Management

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?

get out of debt plan

This page shows you the basic structure of what every plan needs to be successful!

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.

If you haven't already read the page "Things to Consider Before Your Eliminate Credit Card Debts", you may want to do that now. There is great information there and it is a great place to start.

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: Money Management

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, 2009. 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, 2009." 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!

Is Debt consolidation part of your plan to get out of debt? Click Here and start the conversation.

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