Develop a financial freedom plan individually tailored to your exact situation.
Step 1 is the elimination of as much of your debt as possible through debt repudiation by means of the bankruptcy court. The key to your financial freedom is the speed with which you get out of debt. You must implement an aggressive debt elimination strategy. Debt repudiation is the key. It is totally ethical and legal. Credit card debt, medical bills, finance company loans, overdue utility bills and certain types of tax debt will be eliminated at the beginning of your financial freedom plan.
Step 2 is keeping a spending journal for a one-month period. The spending journal is a detailed account of every penny you spend in a given 30-day period. At the end of the 30 days, you will analyze your spending pattern by categorizing the spending and evaluating each category to determine whether you “got your money’s worth.” This is your life and only you determine whether the satisfaction obtained from the spending in any spending category was worth the money spent. Any spending category that brought you fulfillment equal to the cost should be continued. Spending in any category in which you believe you did not get your money’s worth should be curtailed.
Step 3 is finding your debt accelerator. Your debt accelerator is found by analysis of your spending journal. The debt accelerator is that 10% to 20% of your net take-home income that you once spent on things from which you did not get your money’s worth. Concepts of voluntary simplicity are stressed. It is our strong opinion that more is less! The American dream of the big new car, the fancy new house, the boat and all the debt and interest charges that come with it, is the American nightmare. You must master a few simple strategies of voluntary simplicity which make living with your financial freedom plan and debt accelerator easy and fun.
Step 4 is paying off your remaining debt. The debt accelerator is applied to the payment of any debt that remains after the debt repudiation process. Apply the debt accelerator to your smallest remaining debt first. Add it to the regular monthly payment you are already making. The smallest debt will quickly vanish. Then apply the debt accelerator along with the regular payment you were making to the next-smallest remaining debt. Once the second debt is paid, the debt accelerator, along with the regular payments you were making on your smallest and second-smallest debts are paid on the next-largest debt. This will probably be your mortgage. The process of paying off the smallest debt first develops momentum for your financial freedom plan, much like a large snowball rolling downhill.
Once the size of your debt accelerator is determined, you will be able to calculate the exact month in which you will be totally financially free. No debt of any kind. No mortgage! No car payment. No credit card payment! Utilities, food, gasoline and car maintenance, insurance, taxes and entertainment expenses will be your only remaining financial obligations. This is normally achieved in seven years or less, depending upon the size of your debt accelerator and the amount of your debt that remains after bankruptcy repudiation.
There is a light at the end of the tunnel, and it is not a train, it is financial freedom!