How I Will Reduce My Debt

As of today, here is the breakdown of my debt with the steps I will take to get out of debt:

Credit Card: $634

Girlfriend Loan: $2,200

IRS: $3,098

Daddy Loan: $3,475

Mommy Loan: $5,475

Old Car Loan: $7,093

403b Loan: $11,422

Student Loan: $23,297

New Car Loan: $17,459

Total $74,152

My Plan

1. My credit card debt will be payed off completely at the end of this month!

2. My girlfriend needs the money I owe her. Starting in January, I will pay her $175 a month until August, then $200 a month thereafter. This no-interst loan will be paid off by December 31st, 2010.

3. I’ve been paying $100 a month to the IRS. I am very aware that this is high interest loan. If I could increase my payment just by a few dollars, it would help. I’ve made the decision to keep paying the $100 a month on this until I see how my new budget works out.

4. My parents said I can pay them back whenever. I pay them $25 each a month and there is no interest on these loans.

5. My old car loan will be paid off at the end of this month. This is loan has an incredibly high interest rate. I will be paying it off with the 403b loan. The 403b loan has an incredibly low interest rate and the interest goes to me. I pay $211 a month for this loan.

6. My student loan is $165 dollars a month.

7. My new car loan is $300 dollars a month.

How I Will Reduce My Debt Even Further

As I continue to practice very aggressive offense (growing my business) and very careful defense (frugality), I will increase my payments on my debts and pay them off in the following order:

1. IRS

2. Car

3. Student Loan

4. 403

5. Mommy

6. Daddy

In Conclusion

Is this a perfect plan? No. Are there more effective ways to tackle these debts? Absolutely. At the very least, I think it’s great that I finally came up with a plan to try to tackle my debts. As I am writing this, I feel like I giant weight has been lifted off my shoulders.

How do you feel about my plan to reduce my debt?

Next Post: The Budget Meeting