The Debt Freedom Exercise: Let's Play 'If I Were Debt Free'
by Mogamahttp://mogama.info
Just to get an idea of just how much money we pay to lenders, I asked Debt Freedom Club members to do this simple exercise. If you are still in debt, take a piece of paper and do The Debt Freedom Exercise with us.
Step 1. List every debt you owe with the monthly payment amount next to the debt. Let's use John who owes four lenders, as follows...
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Mortgage, $700 per month
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Car Loan, $300 per month
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Student Loan, $200 per month
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Credit Card, $150 per month
Step 2. Calculate the monthly total of all your debt payments. From John's example above...
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Debt payment total, $1,350 per month
Step 3. Multiply the monthly total by 12... That's the amount you're paying to lenders every year. Again, using John's debts...
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$1,350 X 12 = $16,200 per year.
By the way, as of 2010, America's federal minimum wage stands at $7.25 per hour. That amounts to $15,080 per year. So with that $16,200 you're doling out to lenders, you have the financial power to pay the annual salary of a minimum wage worker in America! And you thought you were not wealthy!
Step 4. Calculate your yearly total debt payment over seven years
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$16,200 X 7 = $113,400 (that's a whopping one hundred thirteen thousand four hundred dollars)
Step 5. Finally, what could you do with $113,400? Dream on! Brainstorm... I hope that provides you some form of motivation to remain focused on becoming debt-free.
Were it not for all that heavy debt load, you would hold your own quite well, financially, couldn't you? I do wish you success, fellow pilgrim, as we both continue on our way to the glorious land of Debt Free Living.
Article submitted Wednesday, March 03, 2010 & read 103 times.
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