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  • Debt: 5 Specific Steps to Repay Consumer Debt – PART 2

Debt: 5 Specific Steps to Repay Consumer Debt – PART 2

Written By Millen Livis

I like the change in Nature seasons….

It reminds me the change in Life seasons….

Every season has its beauty.

And to enjoy all your Life’s seasons, you’ve got to win the money game.

One of the big factors in the money game is how you use Debt.

It’s important to remember that if you don’t understand Debt, it’s unlikely you’ll ever enjoy living your best rich life….

In PART 1 of my last week’s article, I wrote about two kinds of Debt and two methods to repay Consumer Debt.

In this newsletter I’m going to share the 5 Specific Steps to Pau off Consumer Debt.

1.  Get clear about the exact debt you accumulated

FACT: many people who accumulated significant Credit Card Debt,  continue paying off any bills that come in, without a clear plan of paying off their debt, without clear strategy.

These people are ideal customers for credit card (CC) companies because you’re consistently dumping your hard-earned money into their pockets!

And you cannot have a plan to attack your Debt if you don’t know exactly which credit cards you owe what amount and what the interest you’re paying on these amount.


So, get empowered – create a table of ALL your debt – the name of the CC company, the TOTAL amount owed, the minimum required monthly payment, and the interest you’re paying to this CC company.

This is the hardest step… You’ve got to have courage to face your Debt “close and personal.”

2.  Decide which Debt you’re going to pay off first.

Different Credit Cards charge different interest rates.

I shared with you the 2 Methods to pay off debt – the Standard Method and the Snowball Method.

So, you’ve got to decide as to which paying off method you’re going to use – the Standard or the Snowball method.

And please don’t spend more than 5-7 minutes on this decision! Either method will work IF you’re going to work it!!

Because the goal is not really optimize your debt repayment process but for you to actually start it, stick to it, and stay motivated till the finish line!

3.  Negotiate your Credit Card Interest

Few people attempt to negotiate the interest on the debt they are paying off to the Credit Card companies.

Does it guaranteed that your efforts will succeed?

NO. Nothing is guaranteed in life.

However, even if you have a small chance to succeed here (like 50% or even less), why not spend a few minutes of your time to give it a try?

Your probability of success with negotiating the interest is definitely more than 0… So, you have nothing to lose and potentially a lot of money to win if you succeed.

4.  Decide which money will be used to pay off your debt

This is an important decision in the process of paying off your debt – what source of money are you going to use?

From the balance transfer to a 0% interest card? From your current income? Or your savings account? Or 401K or other retirement accounts? Or your Home Equity Line of Credit (aka HELOC)?

These could be challenging decisions but necessary and important indeed.

I know that transferring current balances to a 0% credit card, especially large balances, is quite popular…

However, it’s very important to remember that this is just a Band-Aid approach if you’re not going to address your spending habits!

Besides, in some cases the balance transfer process is tricky and used by the Credit Card companies to trap you into paying even more after a certain period of time. So, I’m not a fan of this option.

I am also not a fan of using money from your savings, or 401K, or retirement accounts.

Again, the problem with these options is that you don’t address the spending habits and just kick the can down the road… potentially risking losing your retirement savings or your house, and accumulate even more debt!

I think that making paying off debt your priority, focusing on reducing your spending, and negotiating the interest with the credit card companies is a much better approach, even if it costs you a little more money at first.

So, I invite you to decide what percentage of your earnings will be used to pay off debt? 5%? 10%?

YOU decide.

And at the same time, you’ve got to commit to cutting your spending, so that you can pay off the debt quickly.

5.  Get started.

This is the vital step to achieve your goal.

Don’t plan to start after Thanksgiving or in the New Year.

If you’re truly committed to be debt-free, you’ve got to start NOW – where you are with what you have.

AND having a clear WHY you want to pay off the debt quickly, how it will make you feel, what experiences you’ll have once you’re no longer drained emotionally and energetically by the heaviness of debt, will help you keep going when the going becomes challenging.

Millen Livis

P.S. If you want to watch my 3-part mini-training on this topic, you can find the recording of this entire training on my youtube channel – Millen Livis Channel Wealth

About the Author

Millen is a Wealth architect and Financial Independence Coach, entrepreneur, and a bestselling author. Being a Possibilities' Catalyst, she uses her intuition, business, and investment expertise to support entrepreneurial women (like you) who want to master their money, live their purpose achieve financial prosperity and freedom. With her physics and business education, corporate and entrepreneurial experience, money management know-how, mindfulness practices and transformational coaching skills, Millen has a unique ability to guide and support clients in achieving extraordinary success in their lives.

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