Be Intentional Challenge #22 – Complete the Debt Payoff and Goal Planner (with Free Download)

We are now on day #22 of our Be Intentional Challenges! We hope it has been wonderful, productive and life-changing so far.

And if you don’t know what we are talking about….. read on!

The 30 Be Intentional challenges this month are designed to get you on the right foot, the right track and give you energy, efficiency and organization which will propel you into a life that is able to develop an overall financially smart, happy and frugal home.  We are going to have different themes each month this year (and we have very exciting stuff planned) and this month is your foundation!

We encourage couples and families to do these challenges together so the whole house can function well!

As the 30 days go along, we will be focusing on 5 areas for the Be Intentional Month:

• Self
• Home
• Budget
• Schedule
• Frugality

Here’s the previous 20 challenges in case you missed them and want to get your life on the right track:

1. Set and Be Strict About Bedtime
2. Work Towards Waking Up At The Same Time Everyday
3. Making Your Bed Everyday
4. Get Dressed To Shoes Everyday
5. Hydrate Yourself
6. 5 Minute Stretching and Breathing Exercise
7. Implement a 20 Minute Quick Clean with You and Your Family
8. Menu Planning
9. Dinner by 10
10. Take Your Vitamins
11. Have A Family Meeting To Review, Discuss and Figure Out How To Solve Obstacles Preventing You From Doing Challenges #1-#10. Plus read about the results of our family meeting and our solutions so far HERE.
12. Develop a Nighttime Routine
13. Write Out Daily Schedule
14. Complete the Financial Summary Questionnaire
15. Clean Off and Scrub the Bathroom Counters and Then Do A Daily Wipe Down
16. Complete the Home Map for Complete Clean-out and Organization
17. Find and Fix The Second Thing Sabotaging Your Day
18. Create your weekly, monthly and annual budget (with free download)
19. Create Your Regular Shopping List with Price Comparisons
20. Re-evaluate Daily Schedule and Make Realistic and Necessary Changes
21. Create Your Debt Overview and Calculate Annual Interest and More

As part #2 of 2 on getting rid of debt during Be Intentional month – it is about the planning on how to get rid of it.  We know you most likely won’t be able to get rid of it this month, but planning is what we are all about!

Now while being in debt is not a new thing for us, getting out of debt is not either.  We did get it paid off with diligence and planning.  We are going to now challenge you to get your debt payoff planning done! This next challenge is taking the information that you collected on the previous challenge and formulate a payoff plan/goal, knowing that with income changes (hopefully more income) your plan needs to be flexible.  This planning will go into your home binder for you quick level view of debt payoff.  And we encourage you to print off more of these downloads to update your goals and hopefully they will be sooner than proposed here.

So…. Be Intentional Challenge #22 :

Complete the Debt Payoff and Goal Planner

So for this one, we have provided a download to visually prioritize your debts and write down a goal payoff date.  Please note, if you haven’t completed the previous debts form, we suggest doing that first HERE before completing this step. 

Here’s how to fill this out:

• Print off this sheet
• Then place each debt under the right dollar amount category based on the current balance.
• Then fill-in the interest rate
• Fill-in the balance
• Then skip to the last line and your “rolled amount” will be the payment you are currently making.

Once you complete that part, then next steps are figuring out the priority and your goal payoff date.

To do this, there is a really neat tool on Bankrate HERE that allows you to plug-in all of your debts with current interest rates and facts and they will do a bunch of calculations and come up with what they think is going to be the fastest way and the way to pay the least amount of interest to pay it off.  I find this tool to be quite slick and handy.  Although I do not totally agree with the priority and plan that it came up with using my sample numbers, it is at least a great place to start and very simple.

When Cassie and I were working on our debts, we created an amortization schedule as well.  But we did it the old-fashioned way of creating an Excel spreadsheet and then prioritizing our debts based on all factors (balance, interest rate, whether it was a fixed or adjustable payment and if it was tax deductible). I ran all sorts of queries to figure out how I could reach our debt payoff goal in the shortest amount of time possible.  But I am also a math geek, and so I liked creating these queries myself and figuring it out. Plus, I don’t ever remember coming across any free online tools that figured it out either.

So you can do what we did and figure it all out yourself, or you can use this free tool from Bankrate.

Using the 8 debts examples I created on this list, it took me about 10 minutes to enter them into this Bankrate system for them to give me what they thought was the best payoff plan.

Before you complete this, take a look at your budget now and decide how much extra you can realistically contribute to debts. This is a starting point because we hope to help you increase that amount by helping you find extra money by saving in all areas of life and by potential extra money making opportunities that work for you and your family.  So this is going to be your first-run, worst case if we have no extra money at any time payoff goal planner.

Part #2 steps:

• Head to Bankrate HERE and enter the facts of all of your debts (interest rate, balance, payment, etc.)
• Once you enter all of those in, you will be asked how much extra you can contribute to paying off your debts each month.  For the purposes of this example, I put in $400 (again, we hope to help you find more each month, but start somewhere realistic currently)

• The next questions will ask you of any raises or windfalls that you know of that are coming.  For the test, I just left these blank.  Many of those things cannot be predicted, but if you do know, then by all means, add that in.
• Now what Bankrate will do is take all of this information and calculate a payoff plan and priorities for you.
• So with my 8 debts example which totaled $45,794 in total debts, they have come up with a plan to have it paid off in 31 months with only the $400 extra, plus the rolled over payment amounts from the previous debts.  Just think, if you were able to find that 2% extra each month that we talk about, it would be that much quicker!

• Click on “Get Plan” and you will then see a detailed plan and the priority in which they place your debts.

• You can then use these numbers to prioritize your debts on the download we provided as well as the payoff goal debt.  So as you can see, I put a “priority #1” on the Visa CC#2 with the $6,200 balance and the payoff date of November 2013 and went through my list to do this to all of them.

That is a simple, easy, effective way to set your goals.

Now like I mentioned, this is a good starting point, but I don’t totally agree with the order of priorities. Instead decide the priority based on what makes sense! Here’s some factors I would consider when prioritizing your debts:

• I would actually payoff the two in the $0-$1,500 category first starting with the low balances as it looks like I could get them both paid off with this plan in just a few months and that would give motivation to see one or two drop off right away and two less payments. Plus it would also give me $82 extra per month right away to roll into other debts.
•  I also would wait on the cars until the end as the payments are most likely fixed and they don’t free up any extra cash right away. Debts that have adjustable payments means extra cash to roll into the debts immediately.
•  I would also payoff any Student Loans at the very end because they generally have the lowest interest rates and any interest you pay is typically tax deductible.

So you can think about those additional factors that would help you in deciding which debts were the priority too.

Here’s the download that you need and print this off as often as you need to update your numbers!

<== Download your printable Debt Payoff and Goal Plan HERE

 

One final thing….. we also have a Facebook Group where you can engage in discussions, receive encouragement and talk to others that are participating in the challenges too for more ideas! Head to the Be Intentional with The Thrifty Couple Facebook Page HERE and ask to join us there! You can also invite friends and spouses too!