Page 60 - Workbook1E

An experienced credit counselor welcomes your questions and encourages your progress towards debt elimination with ongoing coaching.
2 Debt Rollup Plan
After Erik and Tracy reviewed their debt situation, it was obvious they needed to use more efficient methods of debt elimination. They employed the help of a certified credit counselor, and together they decided to
implement a Debt Rollup Plan. This plan could help them become completely debt-free in about one-third of the time it would’ve taken if only making the minimum payments.
Erik and Tracy were a bit skeptical at first, but when they ran the numbers on PART II of their Creditor Summary Sheet, they realized it really was possible and their doubts turned into excitement.
How it Works... You must follow a clear and simple program and add NO new debt by carefully following your Spending Plan. One of the most exciting benefits of the Debt Rollup Plan is you do NOT increase your
Total Monthly Payments. Look at PART II of Erik and Tracy’s Step 7 Debt Rollup Summary. Their Total Monthly Payments of $2,985 are the same as on PART I, Step 5 of their Debt Summary. The Total Monthly Payment stays the same for the entire Debt Rollup Plan.
Rolling it up!
Debt Rollup speeds up your debt elimination since once the first debt is paid off, you add that payment amount to the minimum payment of the next debt on the list. So your first payment amount is “rolled up” into the next debt’s payment amount. Eventually the entire Total Monthly Payment will be applied to your last debt —paying it off much sooner — and freeing up those funds to build up your wealth!
Note: All the other debt’s minimum payments are made each month until they reach a point where the larger payment will be applied to them.
PART II—Debt Rollup Plan: Creditor Summary Sheet Steps 6 and 7.
Erik and Tracy’s certified credit counselor pointed out the key to a Debt Rollup Plan is formulating the best order to pay off debts to save you the most time and money. Their advisor helped them determine the new order by calculating each debt and considering a combination of the smallest balance with the highest minimum payment, along with taking into account the interest rate.
“What makes a plan capable of producing results is the commitment of key people.”
~ Peter F. Drucker
56 Workbook 1: Building a Spending Plan that Works