How The Cascading Debt Elimination System Works

A Do It Yourself Debt Elimination Aproach

If you have decided, like thousands of other people, that you want to get out of debt, you may be interested in learning about the cascading debt elimination system. A system such as this can get you out of debt, if you are willing to make a commitment.

This type of debt elimination system is also known as snowball debt reduction because the amount that you begin paying eventually snowballs into a much larger amount until you are able to pay off all of your existing debts. This type of debt elimination system is the one John Cummuta advocates in his Transforming Debt Into Wealth program.

The cascading debt elimination system consists of the following steps:

•  Organize all your debts from the smallest amount to the largest amount on a piece of paper or in a spreadsheet on your computer.
   
• Resolve to pay the minimum monthly payments due on every debt, except your smallest debt. That means if you have debts ranging from $250.00-$25,000.00, then you need to focus on paying off the $250.00 debt first.
   
• Pay the minimum monthly due on the smallest debt you possess and also pay everything else you can possibly pay towards the debt. If it's twenty extra dollars, so be it. If it is one hundred extra dollars, even better. If you can afford to pay off the whole $250.00 in one payment, that's awesome.
   
• Once you pay off the smallest debt, move on to the next smallest debt and pay the minimum monthly due plus the amount your previously paid to the first debt, until this debt is paid off.
   
• Once that debt is paid, move on to the next debt in line, until all your debts are successfully paid off. This creates a cascading effect which applies from one debt to the next, hence the name cascading debt elimination.
   
• Remember to continue paying the minimum monthly payment due on all accounts.

If you have enough discipline and motivation you can tackle this on your own, but if you need motivation and structure, you might want to check out John Cummuta's Transforming Debt Into Wealth program since he provides plenty of motivation throughout his four volume course, as well as workbooks to help you organize your debts.

While some people may think that the payment of debts should be prioritized according to how much interest is owed on each debt, others think that is not as important as actually making progress to pay off the debts. The cascading debt elimination system is psychologically effective. By paying off the smallest debts first, you will feel as if you are making more progress, than if you begin slowly chipping away at the largest debt you have.

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