Chapter 4. Debt
Activity: The Hidden Cost of Credit
Your largest wealth-building tool is your income. When you don’t have any payments, you have money. The second Foundation is Get Out of Debt. There are five steps for getting—and staying—out of debt:
- Quit borrowing more money!
- Save an emergency fund.
- Sell something.
- Get a part-time job or work overtime (temporarily).
- Use the debt snowball method.
The Debt Snowball Tool will help you simplify paying off debt. Simply add each debt to the list:
- Enter a title for the debt.
- Select the type of debt.
- Enter the current balance of the debt.
- Enter the minimum payment.
- Enter the interest rate.
- Enter the monthly payment due date.
- Enter any other debts in the same way by clicking “Add Debt to List”
- Notice your debt-free date in the upper right corner.
- Increase your monthly payment as you pay off smaller debts, increase your income, or get lump sums of money by selling things or getting gifts. Just click “Edit” and watch your debt-free date get closer!