Eliminate Debt Central

Today there are a lot of ways to get out of debt. It seems as if there is someone claiming they got a system that will get you out of debt in no time flat. So in this article I’m going talk about two people who have been the leaders in helping others get out of debt, Dave Ramsey and John Cummuta. In this article I’m going to be discussing both of their methods.

The John Cummuta Plan

With the John Cummuta Transforming Debt Into Wealth Program it’s a pretty basic straight forward system.  In this program he walks you through a simple process were you line up you debt into what is called the debt snowball plan.  This is a very simple process were you line up all of your debt from the highest amount to the lowest amount.

You then pay off the first debt with an extra $50 to $200 while you pay off just the minimum on the other debts.  Once the first debt is paid off you proceed to the next debt paying the extra amount plus the minimum you were paying on the first debt.  Doing things in this order speeds up the process and helps you pay off the debt much faster.

The Dave Ramsey Plan

Now that we understand the John Cummuta Plan lets see what makes the Dave Ramsey Baby Steps Plan any better.  First off, Ramsey’s plan is much more efficient.  It also included the debt snowball plan but is a much better rounded program.

The program consist of several parts.  They are as listed below.

1. Save $1000. This is done to protect you from sitting up all night and worrying about where next months payments are going to come from.
2. Pay off all debt but your mortgage. This is where you implement the debt snowball plan.
3. Fully fund your emergency fund. This is where you save 3 to 6 months of cash flow to protect from emergencies.
4. Save 15% of your income for retirement. Saving a minimum of 15% will allow you retire comfortably.
5. Complete college funding. Giving your children a good education is a big necessity these days
6. Pay off your house. With everything else taken care of we can now pay off our house early.
7. Build wealth and give back. Now that all the debt has been paid back and we are saving more than we ever have it’s also a good time to give back to others and help them get debt free.

In Conclusion…

Obviously it’s not hard to see which plan is better.  The John Cummuta plan helps you get out of debt but the Dave Ramsey plan is a more complete plan showing not just how to get out of debt but how to save more money and stay debt free for life.

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