Debt Elimination Success Seminar
 |
|
 |
Section 1
A Look at Debt
History of Debt
Credit Card History
Current State of Debt
How You Got Into Debt
Good Debt Bad Debt
Business vs. Personal Debt
Section 2 Dealing With Your Money
The Two Step Plan
Doing The Two-Step
Step One
Step Two
The Paths Out of Debt
1- Create a Debt Payment Plan
2- Neogtiate Better Rates & Terms
a.Consolidation Loans
b.Consumer Credit Counseling Services
3- Negotiate Lump-Sum Settlements
4- Bankruptcy
5- The Easy Way
6- Win $1,000,000
Living Debt-Free
Manage Your Money
Make More Money
Save Money
SameMoney-MoreFun
Stay Debt-Free
You as a Business
Section 3 Dealing With Your Creditors
Alerts/Scams
The Credit Industry
Credit Industry
The Fine Print
The Secondary Debt Market
The Debt Collection Process
Original Creditor
The Charge-Off
Collection Agency
Legal Problems
Dirty Creditor Tricks
Dealing with Debt Collectors
Dealing with Debt Collectors
Statute of Limitations
Cease and Desist Letter
Section 4
The Credit Report
The Credit Report
Credit Score
Credit Repair
Section 5
Dealing With Yourself
The Critical Factor
The Art of Prosperity
The End of Failure
Prosperity Coaching
Section 6
Kids and Money
Kids and Money
How to Pay for College
Section 7
Debt Information
Bookstore
Debt Facts
Radio Show
Resources
About Us
Privacy Policy
Site Map
If you find this information helpful I ask you to contribute to help me help more people. You can contribute through PayPal by clicking on this button Or you can mail in your contribution.
|
|
Host: Tom Allen
Guest: Steve Smith
Segment 3 - Your Personal Getting Outof Debt Plan
Tom: I’m Tom Allen and I hate debt! I invite you to make the decision today to join with me in living a debt-free and prosperous life. It’s your debt. It’s your responsibility. And it’s up to you to put together a plan to get rid of it. But here to help is Steve Smith from Mvelopes, the computerized version of common sense financial management. Steve, Mvelopes, (let me make sure I got that right - Mvelopes because it’s based on the envelopes system but it’s the computerized version Mvelopes), can not only put together and organize a plan for monthly spending but it can, and this is very important for everyone who’s listening to the I Hate Debt radio show, it can put together a personalized debt elimination plan. How does that work?
Steve: Well, a lot of people now are familiar with the debt roll down principle. And let me just explain that quickly. Basically what you do is you put together a complete list of all of your debt obligations and then you list them by the amount owing, the monthly payment and the interest rate. Then you prioritize those top to bottom based on either the smallest outstanding balance or the highest interest rate. And then you determine the total amount of money that you’re using monthly to pay those debt obligations. Now obviously you have money coming in to meet those obligations and so the theory here, the concept here, is that you would continue to pay that total amount every month until you’ve successfully eliminated all of your debt. As the first debt is paid you would roll the amount, the monthly payment for that debt, to the next debt on the priority. So if you were paying, for example, $50 on a store card and you paid that debt off and your next priority debt was a Visa card where you’re paying $100 a month, you would roll the $50 to the $100 and start making $150 payments on your Visa card. As soon as that debt’s paid you take the $150 and roll it to the next priority debt. And as you roll through this and continue to make a consistent payment, total payment, to your debts you can eliminate all of your debt very, very quickly including your mortgage, car payments and the like. You just have to be very, very consistent with that program and very dedicated to that. And that’s where Mvelopes comes in.
Tom: And of the course the number one rule at Ihatedebt.com and the number one rule that will make this system work is you have to stop creating new debt. Steve, the reason I’m so excited to have you here today and to be talking about the Mvelope system and the roll down method of getting out of debt is this is exactly, exactly what I did. And it works! And it works easily. And I believe most everyone in America if they did these two things - started preplanning their spending and using this debt reduction plan - almost everybody could be out of debt. As you said including their mortgage, but if you just look at their credit card debts, they could be paid for within about three years.
Steve: Yeah. They can get completely out of consumer debt within that short period of time. And often can be completely out of debt, including their mortgage, in seven to nine years.
Tom: We’re talking about no more car payments, no more mortgage payments, no more credit card payments. Then you’re in the position to be able to take all that money that you were paying to creditors and put it into – get this – an investment account and start to build true wealth for yourself. But lets stick, again just for the moment, on this getting out of debt plan.
Steve: Yeah, again there are a couple of reasons why you should use Mvelopes in conjunction with this debt roll down principle. First of all, you need to be able to consistently live within your means. And what we have found is that if people will use the envelope, the traditional envelope principles, in conjunction with Mvelopes Personal they can, rather than spending about 10% more than they make, they can start saving about 10%. And if you think about that you’ve just gone from increasing your debt load month over month to a position where you can start to eliminate debt successfully. Now as you set this debt roll down program up, (and if you reference this in the book “Money for Life” I go through a number of examples on how you can do that successfully and integrate that together with Mvelopes Personal), but as you set that up you create an envelope, basically a spending account for each of these debts. And you fund it from your monthly cash flow with the amount of payment that you plan to make. As you pay off each debt then you roll the funding for that specific spending account to the next spending account that represents the next priority debt. One of the other things that you can do with the debt roll down principle is if you’re now saving money with Mvelopes you’ll find discretionary accounts, spending accounts where you’re saving money, every month. Whether you save $10 in groceries or you save $20 in auto fuel or you save, you know, some money in entertainment or dining out or whatever it is at the end of the month that really represents true savings.
Tom: That’s real money.
Steve: That’s real money. And what we recommend for those accounts where it is, you know these are accounts that you fund every month, when you get to the end of the month and you have real savings in those accounts, rather than rolling that money over to the next month so that you would spend more the next month, basically you transfer cash out of those envelopes and put it into your debt reduction envelopes. So in Mvelopes Personal you just do an envelope to envelope transfer and you move that $20 from groceries into your first priority debt payment envelope. And so next month rather than making your $50 payment on that store card you’re actually making a $70 payment on that store card or a $100 payment on that store card when you sweep that savings from all of those discretionary envelopes into that first priority debt reduction envelope. We call that an accelerator. And you know that gets very exciting. And if you want to get a feel on how successful you can be with that you can visit our web site and we have a debt calculator that is just brief to use. You can put all of your debts in there. You can calculate maybe a 10% accelerator on top of your total spending and you can see very, very quickly how successful you can be at eliminating all of your consumer debt and even your mortgage in a short period of time.
Tom: What I found is that it really got to be, it was a game. It was really fun to come up with that extra money. It was always kind of in your mind when you were spending. Not on your mind in a bad way but in your mind in a good way because it was a little bit of a challenge. How can I save 10% here and 10% there knowing that at the end of the month it’s going to add to that accelerator amount which is going to reduce your debt even quicker? And you know that every time you go to the grocery store you are spending within your means and helping to eliminate your debt. I know I did things like, I found this to be so exciting in such simple ways, I would have an envelope for something like household expenses. And in that, for me, would be paper towels. And if I would normally spend, you know, $1.19 for a roll of paper towels and I would see them on sale for $0.79, I know that I could stock up because my envelope had that money in it. I was spending my household expense money on household expenses but was able to take advantage of sales and that money added directly into my cash at the end of the month that I could get out of debt quicker with.
Steve: Yeah, I mean what you’re talking about from a psychological perspective is being in a proactive decision making position. You are able to make solid spending decisions because you’re absolutely and completely in control.
Tom: And you never saw a guy so excited about saving $0.30 on a roll of paper towels!
Steve: It’s funny that you say that because I, you know, I talk to people all the time that repeat exactly what you’re saying. And what a great feeling! What a great feeling knowing that you’re absolutely moving forward. Every day you’re increasing your net worth because you’re removing debt and you’re now saving money.
Tom: Now, quickly, here’s the exciting part. How long does it take using the Mvelopes system to put together your personal getting out of debt plan?
Steve: Oh, you can put together a getting out of debt plan in just a few minutes. The fact of the matter is when you sit down with Mvelopes Personal you have to go through and create a spending plan. And that takes a little bit of time for you to understand exactly, you know, where you’re spending money and how to put the pieces together. But it doesn’t take very long. And if you work together with a spouse or a partner that is there spending money with you, you are always much more successful. But if you’ll take that little bit of time up front I’ve found - and I talk about this in both the book “Money for Life” and in the new “Money for Life Success Planner” - I’ve found that if people will just stick for that for about twelve weeks they will be well on their way. They will have gone through the cycle of adjusting their spending plans three times every month. You just make it a little bit better. And I’m sure you found that as you were putting together an initial spending plan. It just gets more solid and better all the time.
Tom: And it becomes a habit that you don’t have to think about.
Steve: That’s right.
Tom: It becomes automatic.
Steve: It almost goes into autopilot. And after three months, or twelve short weeks, you’ll be in a mindset that will just continue to propel this forward very successfully for you for the rest of your life.
Tom: And speaking of the rest of your life we’re going to find out how using the Mvelopes system you can put together a wealth building plan that will help you retire with tons of money so you won’t have to worry about that. You only need to worry about where you’re going to invest all your money. Steve Smith from Mvelopes will be right back to talk to us about that. For more information you can find Mvelopes banners and links at Ihatedebt.com or put in Ihatedebt.com/Mvelopes. I’m Tom Allen, and I hate debt!
Read the transcript of Steve's next segment Building Wealth with Mvelopes
Steve Smith Your Personal Getting Out of Debt Plan
If you find this information helpful I ask you to contribute $1 (or more) to help me help more people. You can contribute using PayPal using this button
Or you can mail in your contribution.