# Thermometer Debt Reduction

Need a way to get control of your spending and reduce debt? Read on to see what our family has done to turn getting out of debt into a sort of game. You may be curious what it has to do with a thermometer, but you’ll have to start at the beginning.

Here are the steps that you need to eliminate debt with the thermometer method:

1. Total your debt. The first step to getting rid of debt is totaling the amount of debt that you actually have. You should decide which debt you are concerned about eliminating at the moment. Likely, you will total your credit card or other consumer debt and your vehicle loans. Most people will choose to leave their home mortgage off of this debt elimination plan. Others may decide to leave their car loans out of this plan as well. Whatever you choose, you’ll need to find current statements from each of your debtors stating what you still owe. In addition, most companies now have this information online.

2. Make a chart. We chose to make a visual representation of the amount of debt that we owe. I drew a large thermometer onto a piece of poster board and made a scale on it to show our progress. The total amount owed should be at the bottom of the thermometer, and \$0–your goal–should be at the top of the thermometer. The easiest way to make your thermometer is to draw your scale first, using a ruler for your chosen increments, then draw the thermometer once your scale is mapped out.

In addition to our large thermometer, we decided to include graphs for each of our debtors. Underneath the thermometer on the poster we drew a bar representing the amount of debt we owed for each of our cars and to each credit card company. These also had a scale and represented the amount owed for our separate debts, instead of our combined debt. We wrote what the debt was for next to each bar and we also wrote down the interest rate of that debt. We decided that in addition to making the minimum payments, we would put all of our extra money towards the debt with the highest interest rate.

3. Get cracking. My husband and I hung our chart on our bedroom wall?where we could see it daily, but where it was not out in the public areas of our home. Every month we would calculate the debt we owed to each company and record these amounts in our bar graphs at the bottom of our chart. We did this by shading in the area with a marker. Adding these amounts together we got our total debt. We shaded in our progress of our total debt on the thermometer.

We also decided that as a reward, when we completely paid off one creditor, we would go out to dinner. This gave us even more incentive to pay down our debt since we very rarely spend the money to go out to eat.

Using this method of debt reduction was great for us because it gave us a visual reminder to keep our spending down and work towards getting rid of our debt. Thanks to our thermometer and our frugal ways, we are nearly debt-free!