Making consistent monthly payments is a great step towards eliminating debt, but it can be a dreadfully slow process. Without the right payment schedule you, could be paying off whatever you charged long after the item is actually of any use to you. Unless you want to accumulate an amount of interest that would equal the price of a new car, it’s time to switch things up with one of our favorite tools.
Split Discretionary Evenly is an Ovation tool that lets you create a payment schedule designed to dwindle your debts faster than by simply meeting the minimum obligations of your creditors. What is unique about this payment plan is that it utilizes discretionary funds, which are monies used in addition to your monthly payments. The goal is to set aside an amount, separate from what you already pay, and then split that amount evenly among all your debts.
Using this payment schedule, what will eventually happen is that one debt will be paid off with the extra payments made. Then, the money that initially went toward the monthly payment for that debt can be placed in the discretionary fund pool. This can again be split evenly between the remaining debts, paying off your balances at an even higher rate than before. This trend continues until all debts have been successfully paid off.
One benefit of Split Discretionary Evenly is that payments are continuously being administered to every debt held. When payments are not being made, interest rates soar to unnecessary levels, making it even more difficult to pay off what is owed. An even split is also much easier to keep track of, so you won’t have to worry as much about what amount of money should be going where.
Setting aside funds in addition to your monthly payments may seem overwhelming, but it is completely possible. As always, do not go beyond your financial capabilities. Instead, consider ways in which you can reduce spending elsewhere. You would be surprised at how fast that morning coffee adds up. The less you spend on beverages, fast food and other frivolous items, the more you can contribute to ridding yourself of debt.
You may be making monthly payments, but if you truly want to escape debt, the bare minimum isn’t enough. A conscious effort must be made to live frugally. By doing so, payment schedules such as Split Discretionary Evenly are remarkably effective. Of course, this payment schedule is only one of the many Ovation Financial Tools available to pay off debt sooner. Find the one that meets your financial needs, and start on the path to debt recovery.