|
The Roll-Down Method of debt elimination is one of the fastest ways to become debt free. In fact, most folks will be completely out of debt in less than one-third the time it would have taken them the conventional way.
So just how does it work? Very simple. First, you add up all of the monthly payments you are currently making on your outstanding debts, including your mortgage. Let's say it totals $1,875 per month. This is what we call your roll-down amount.
The Roll-Down Amount, calculated above, will be paid on whatever debts are still outstanding each and every month until all debts are gone. Even as debts are paid off, you do not reduce your Roll-Down Amount.
When the first debt is paid, the monthly payment associated with that account is rolled down and added to the minimum monthly payment of the second debt.
When the second debt disappears, what you were paying per month on that debt, including the roll-down amount from debt #1, is then added to the minimum monthly payment of the third debt, and so on until all debt payments are being applied to your mortgage.
That's all there is to it. Simple, yet powerful, this method will get you debt free in no time.
Next week we'll take a look at "Power Money."
Until next time, Al Crisp, CPA
| 
