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Eliminate Debt Without Surplus Cash
Planning For Debt Elimination Without Surplus Cash

Previously we looked at using surplus cash each month to chip away at those
outstanding loans, on our long road to debt elimination. But what can you do
if there is no surplus cash every month?

So, you have examined your monthly outgoings, and there is nothing to cut
out in the way of expenditure. Or you can make some savings, but it just
brings your outgoings and income into balance each month, whereas before
your outgoings were in excess of the income. Well, at least you have made
some progress by bringing income and expenditure into equilibrium. But
where does that leave you in your debt elimination challenge? It is probably
time to focus on those debts, and see what can be done to bring down the
cost of those loans, and the monthly repayments. It may still be possible to
plan for debt elimination in 5 years, especially with your newly developed anti
debt mindset.

Taking out another loan will not, of course, bring instant debt elimination.
However, it may be that a debt consolidation loan will give you a chance to
structure your plan over a 3, 5 or 7 year period. With the right approach, this
may be an excellent opportunity to improve your finances no end, resulting in
debt elimination at the end of the loan period. The key will be in whether you
are able to reduce your total loan repayments, and whether you are then able
to set aside those savings each month. Let us look at a simple example, of a
consumer who has two credit cards and two other loans. He owes a total of
$11300, and has a minimum monthly payment of $346. Let's say he is able to
obtain a new consolidation loan at 10% annual interest, and would have
repayments of $240 per month over 5 years, a saving of $106 per month, or
$6360 over the 5 year period.

That is a significant amount to put away each month. Enough for a
replacement second hand car? No need for any more loans? In which case,
debt elimination, by our definition excluding the mortgage, could be achieved
within that 5 year period.

There are, of course, millions of permutations of figures, so you will have to
consider your own. But the principles are always the same. Living within your
budget, planning ahead, and saving for any future purchases in cash. That's
a simple formula.

All it needs to accomplish debt elimination is your new mindset; the mindset
that does not want debt, borrowings, loans to be a part of your future life. The
mindset that has patience in clearing the debt, and is able resist new
purchases of optional items until the cash is available.

It is worth always remembering, if you cannot to afford to pay cash for
something, then you cannot really afford it at all. The only exception is the
house, where the investment potential and rent saving alter the financial

Once you have the cash-save mindset, you have all you need to clear
unwieldy and expensive debt from your life, once and for all.

This debt elimination article was written by Roy Thomsitt, owner of the
Eliminate Credit Card Debt Now website.

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