Should I stop saving altogether and put everything into paying off my credit cards?
How much should I apply to my debts?
What is different about your system than others?
How do I know if I should just file for bankruptcy?
How much is too much debt?
Should I take money from my savings to pay off my existing credit cards bills?
Should I take out a mortgage loan to consolidate my bills?

Should I stop saving altogether and put everything into paying off my credit cards?

Some organizations will tell you to stop saving and just apply all you can to your debts? Although this can get you out of debt faster and save you some money on interest expense, I am not an advocate of this philosophy for one reason alone. You are violating the single most important principle of financial success, to pay yourself first by spending less than you earn . The most important step you can take to start building your financial independence is to immediately start saving a minimum of 10% of your gross income into an investment vehicle you commit to never spending, no matter what.

In addition, there is also a subconscious element that you are only working to pay your creditors and this does not inspire people. Pay yourself first and you will begin to build positive momentum and a pride that, I believe will outweigh the issue of time and money.

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How much should I apply to my debts?

I say as much as possible and setting a minimum of 10% of your gross income. The ideal amount would be 20% and even more if your budget allows for this. This amount will be largely based on the sum total of your minimum monthly payments. This requires measuring and evaluating where your money is going so that you can free up as much cash as possible to apply to your debts. In my CREDiT Method (5 easy steps to getting out of debt forever), we cover this process so that you get the maximum results in the shortest period of time.

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What is different about your system than others?

When you get down to it, there are only 6 different methods you can use to get out of debt, from bankruptcy to running away. Each of these options has upsides and downsides to them.

My easy to follow system utilizes all of the upsides while eliminating many of the downsides of each method. Because I have suffered the "blood, sweat and tears" and have made this area a focus for more than two decades, I have simplified it into easy actionable steps so you get results fast. Let's be real, if it's not easy you won't do it.

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How do I know if I should just file for bankruptcy?

Bankruptcy should always be a last resort. There is little pride involved in this method and the downsides can hurt you for many years. There are many other options that can preserve your sense of pride while protecting you and your family. As long as you have an income and you have the ability to control your expenses you can find a way to avoid filing for bankruptcy.

Remember if you are truly committed , you can always find a way to reach your goals.

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How much is too much debt?

Remember that it is not the debt itself it is the consequence of the debt otherwise known as interest payments or the cost of borrowing that hurts us. Most lenders will continue to lend you money until your debt payment ratio (DPR) reaches 40%. This is the amount of your total minimum monthly payments divided by your gross monthly income.

I would say that, if your DPR is at or above 20% you need to seriously consider stopping all borrowing . Of course the ideal is to have a zero percent DPR (not including your mortgage), as this is where the foundation of financial independence is built by saving a large percentage of your discretionary income towards long-term financial independence.

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Should I take money from my savings to pay off my existing credit cards bills?

I am a big believer that once you have saved money, you should rarely ever pull it out to pay bills, unless it was already earmarked for some other expense or emergency purposes. Doing so tells your brain that it's okay to save only to spend later, and this pattern will not support your long-term goals. The key to avoiding this is deciding upfront what the money you are saving is for (i.e. retirement and financial independence, college tuition, a vacation, etc). This being said, in some instances where I have Coached someone, I may have encouraged them to spend a small chunk of their savings or investments to get a head start on their debt elimination plan.

In section 2 of my E-Book I show you how to chunk and organize your goals, using "buckets" and "cookie jars" so that you won't fall into this dangerous trap while continuing to make progress on paying down your debts. The moment you take this money out towards expenses you are violating the #1 principle of financial success.

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Should I take out a mortgage loan to consolidate my bills?

If you have studied and used my material, we offer you the 6 Master Steps for Ending Debt, Forever. Consolidating via home mortgage refinance, 2nd trust deeds or traditional consolidation loans falls under step 3, Create an Effective Plan to Pay it Off . The problem with consolidation is that most people skip step 1 & 2, which is the foundation for staying out of debt. Like building a home, you must pour the foundation before you start hammering nails and constructing the frame.

You must first get leverage on yourself (meaning you link massive pain and negative consequence to your current situation) and second interrupt your current spending pattern or you will wind up with new debt on top of the bigger mortgage payment, or larger consolidation loan, making things even more difficult for you and your family in the future.

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