A Deleveraging technique we use…

We have been doing this for probably a couple of years now, it seems to work for us and it keeps our spending/splurging in check.  What we do is when we decide we want something, we put it on “The List”, this is an ongoing list that we have, ranging from lasik surgery for me down to a mulching the yard, or it could be a book or DVD, all those things are wants not needs.  Notice that I said “want” something, if we “need” something that means we don’t have a “choice”.  Now, you have to stay honest with yourself, you can justify probably any want into a need if you try hard enough.  That is not the point here.  Put everything on that list and hold back.  Now that we have a list, we work towards our goal.  What we do is for every 5K we bring down our total liabilities on our Financial Statement we get $500 to spend on whatever we want.   You could make the goal a little smaller and then just make the reward 10% of whatever the goal, let’s say you pay down 3k, you get $300 for a splurge.  And if you have $1000 cash flow each month to put towards debt, every three months you could have a $300 splurge.  That isn’t bad.  If you have things on your list that are higher than your splurge, forgo a splurge and put it towards the next one so you will have $600 to spend, etc.  So this will not only help you knock out your debt but also control the spending on the other end to help you pay down more debt, then it becomes a snowball affect.  Anyone else use a technique to help make the saving/deleveraging thing a little less painful?

~ by debt2dreams on November 24, 2008.

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