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Book Excerpt

Pay down your debt in record time Add to ...

The following excerpt is from Debt Free for Life by David Bach.

So you're ready to get going, aren't you? Good, because now I'm going to share with you a system to pay off your debts that is so simple you can be up and running with it in less than an hour.

Yes, you read that correctly! If you follow the instructions I am about to lay out for you, in less than one hour you will have a foolproof system to pay off everything you owe once and for all.

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The system is called DOLP ®, short for Done On Last Payment. (In my previous books, I wrote that DOLP stood for "Dead On Last Payment," but readers suggested that "Done" was more motivating than "Dead"-so I have changed it). The DOLP system is the cornerstone of your Debt Free for Life Plan. I've been talking about DOLP for well over a decade now. I've taught it to millions of people on shows like Oprah and NBC's Today, and through numerous appearances on ABC, CBS, Fox, and other TV networks. I've also described it in a few of my previous books. There's a good reason I've stuck with the DOLP system all these years: it's simple and it works.

Are you ready? Great - let's go.

GET STARTED ORGANIZING YOUR DEBT

The first step in DOLPing your way out of debt is to get organized.

It's a lot like getting on a scale before you start a diet. You have to step right up, open your eyes, look down-and face the truth.

Debt is something you need to see in black and white. You can't expect your Debt Free for Life Plan to work-and you won't be able to measure your progress each month as you pay down your debt-unless you start off knowing exactly how much you owe.

Are you excited? You should be. You're about to change your whole life.

GO GET YOUR CREDIT CARD STATEMENTS

To start the process of getting your debt organized, the first thing you need to do is go and get all the statements and other documents from every credit card account you have. Then go and get some folders. (Ideally, they should be red so they will stand out in your file drawer.) Now create a file for each different credit card account and label it appropriately (e.g., "Visa Credit Card").

From now on, you will put all of your statements and payment receipts for this particular account in this particular folder.

On the front of each folder, I want you to write with a big black marker the total amount of debt you currently owe on each card. Make the numbers big and bold so you can instantly see in black and white how big this particular debt is, and next to this figure write down today's date. Each time you make a payment that reduces this credit card debt, you will cross out the old total and below it write down the new, smaller total you owe.

In this way, you will automatically create a handwritten journal that keeps track of how your debt is shrinking. Just seeing a record-in your own handwriting-of the progress you are making each month is going to motivate you as never before.

In a few minutes, you are going to take this information about your credit card debt and start filling out the DOLP Worksheet on page 58. But for now I simply want you to do the simple arithmetic needed to complete the short credit card worksheet below.

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FIGURE OUT HOW MANY CREDIT CARDS YOU HAVE

Number of credit cards I have: ______ Number of credit cards my spouse/partner has: ______ Number of credit cards my kids (or other dependents) have: ______ Total number of credit cards my whole family has: ______ The total amount of debt we carry on these credit cards is $______ The total monthly minimum payment due is $______ --- To figure out the totals, use the worksheet below. List each credit card account and its current outstanding balance, starting with the smallest debt and working down to the largest. In this way you will figure out exactly how much you owe and who you owe it to.

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