The Debt-Free Ladder

Let’s face it, when you want to reach a place that is waaay up there and seems unreachable by normal means, you get the right tool for the job, a ladder.  By climbing the rungs of this ladder, first the lower rungs and then the middle rungs and finally the higher rungs, you end up at your goal.  In this case, your goal is to be debt-free.

I use the example of a ladder because the rungs of the ladder represent each one of your individual debts that you need to climb up and over before you can reach your goal of getting out of debt and building wealth.  It will take climbing every rung and not skipping any, however, to get to the top of the debt-free ladder.

So here is the premise of the debt-free ladder.  Sit down with a list of all of your debts, which will include everything except your properties and housing bills.  Examples of these debts would be credit cards, student loans, vehicle loans, loans from family members, personal loans, etc.  Once you have this list, sort them by balance from lowest to highest.  Do not take interest rates into account, just take to the current outstanding balance.

Once you have your current debts sorted, you can see exactly how tall your debt-free ladder is.  How many rungs do you have to climb?  Don’t worry, you will make small accomplishments right away because we put your lowest balances first.  This is where not skipping any rungs becomes important.

Since you have an emergency fund in place, you shoukd feel confident to begin climbing your debt-free ladder one rung at a time.  The great thing about these rungs is that once you finish with one rung, that rung joins with the next rung to increase your stride.  Once you pay off your debt with the lowest balance, you then take the minimum monthly payment for that debt and add it to the monthly payment for the next lowest debt (rung).  This will help you pay the debt off even quicker.  And once that debt is paid off, you add what you were paying to that debt to the next debt and so on until yoh are literally flying to the top of your debt-free ladder.

I am also going to be honest with you.  If you think this is going to easy, think again.  It is going to take changing the mindset that got you into debt in the first place.  It is going to take looking at yourself and telling yourself that you have had enough of living this way.  It is going to take dedication and sacrifice.  But I believe that is why you are here reading this article and I believe you can do it.

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When you get to the top and you take the chance to look around at the world that has been passing you by for so long, you will have wondered what took you so long.

Please feel free to share your journey in the comments.

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