The key to getting out of debt in the shortest time possible is to put the maximum amount of surplus cash into the program. 'Accelerator' is the amount of surplus cash available after the total of monthly minimum payments.  Adding the 'Accelerator' amount to the monthly minimum payment will result in accelerated debt repayment. Therefore, when you prepare your Family Budget form, you will want to be frugal in calculating the maximum amount of Surplus Cash you have left over after paying all your living expenses. Look for money everywhere! You must come up with a positive number for the Surplus Cash calculation in order for this program to work effectively. We have attached a free Family Budget worksheet below that will provide a great tool for you to accomplish STEP ONE which is completing the budget.

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Next, determine the 'Priority Index' of your accounts which is based on the average of the total balances owed versus the minimum monthly payment. Once this is calculated, MFCS will arrange the bills starting with the one with the lowest balance and proceeding through the list to the creditor with the highest outstanding balance at the bottom of the list. Your first objective is to ATTACK the debt with the lowest balance and pay it off first and then afterward descending down the list as you pay off each creditor with the lowest remaining balance.

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As the final step, add the full Accelerator amount to the monthly minimum payment at the top of the priority list and do that every month until it’s paid off. The top of the priority list is the one with the LOWEST outstanding balance. All the other bills receive just their normal minimum monthly payments.

 

When the top priority bill is paid off, i.e. the one with the lowest balance, calculate a new Accelerator by adding the monthly minimum of the bill you’ve just paid off to the old Accelerator. Then move this as a new Accelerator down to the second bill on the priority list adding it to the normal minimum payment you’re already paying. Continue moving down the list in this manner applying an increasing Accelerator to each monthly minimum until the entire list of debts has been totally paid off. If you ever receive extra money for something, always pay down the remaining creditor with the lowest balance.

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Here is an example....

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There’s no significant difference in the repayment time between this approach and one that features a prioritization by interest rates. When we run the two different approaches through the computer, they always come out about the same. The advantage of the recommended approach based on the lowest outstanding balance is that you’ll begin to see progress earlier in the program which helps motivate most families to push through to victory. 

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We urge you to contact us for a FREE assessment to see if you can benefit from an Accelerated Debt Repayment Plan. Once again, complete the monthly Family Budget below as your initial step!