The DIY Debt Management Plan: Your Path to Debt Relief



Do you feel like you are shackled in the prison of debt and see a debt management plan as an easy break out plan? A "Debt Management Plan (DMP)" usually refers to a formal arrangement through a credit counseling agency.  The benefit of this process is that you sign up, pay a monthly fee, you pay the agency your payments for the debts,  and they make the payments for you to your creditors.  You give them the ability to access your account and make payment arrangements on your behalf.  One payment instead of 3, or 5, or 10 payments, sounds wonderful.  But does it help you to change your habits around money?  Is it faster or less expensive?  Are they really doing what is expected or are they pocketing the money, making interest on the money, not paying the bills until they are delinquent and then the creditors are willing to make a deal?  

While the thought of making one payment and someone else will work their magic and the debt will disappear sounds wonderful, but you are not changing your habits and will soon need assistance again.  A DIY Debt Management Plan—which aligns with the principle of self-stewardship—is simply a highly disciplined, self-executed strategy to eliminate debt. And you can do it.  

Here is the description and a five-phase plan for people to complete entirely themselves, using the Debt Snowball as the forced repayment strategy.

The DIY Debt Management Plan (DMP)


Description


A DIY Debt Management Plan is a personal, self-directed strategy where you take full control of your debt repayment by creating a strict budget and applying a focused, disciplined repayment method.

This is Biblical Stewardship in action. You are accepting personal responsibility for your financial decisions and applying God-given discipline (not external loans or third-party fees) to get yourself out of debt.

The plan is structured to provide momentum, keep you motivated, and permanently change your financial behavior, which is the key to building lasting net worth.


Legal & Compliance Note


All steps in this self-managed plan are presented as coaching and are completed for them or by the structure of the Debt Snowball Method. You must follow these phases sequentially to ensure success.

The 5-Phase DIY Debt Management Plan


Phase 1: Stop the Bleeding (The Budget & Debt Fast)


This is the immediate, non-negotiable step to halt the accumulation of new debt and find the cash flow for the plan.

Action

Goal & Coaching Tip

1. Create a Zero-Based Budget (ZBB)

Every dollar of your income must have a name (a job) before the month begins: Income - Expenses = 0. Use your income for tithes/giving, savings, essential bills, and debt.

2. Cut Up Credit Cards

You cannot successfully execute this plan while using credit. Freeze, shred, or put away all credit cards. Use only a debit card or cash for all transactions.

3. Build the Starter Emergency Fund

Save $1,000 as fast as possible by cutting expenses. This fund serves as a "buffer" so that life's small emergencies (flat tire, appliance repair) don't force you back into debt.



Phase 2: The Inventory (Know What You Owe)


You must gain total clarity on the scope of the problem.

Action

Goal & Coaching Tip

1. List All Unsecured Debts

Create a spreadsheet or use the Debt Snowball Tracker. List every debt except your mortgage (credit cards, personal loans, medical bills, car loans, student loans).

2. Capture the 3 Key Figures

For each debt, record the Creditor Name, the Total Balance Due, and the Minimum Monthly Payment. Ignore the interest rate for now.

3. Calculate the "Debt Drag"

Add up all your Minimum Monthly Payments. This is the base amount you must budget for debt every month.


Beneficial Links:

Phase 3: Choose the Repayment Strategy (Debt Snowball)


The plan is designed for behavioral change over mathematical optimization.

Action

Goal & Coaching Tip

1. Re-Sort by Balance

(Forced Action) Reorder your list from the smallest total balance to the largest total balance.

2. Determine the Snowball Amount

Take the "Debt Drag" (Phase 2 total) and add all the extra cash you freed up in your ZBB (Phase 1). This is your fixed, large Debt Snowball Payment.

3. Begin the Attack

Pay the minimum payment on every debt except the smallest one. Throw the entire Snowball Payment at the debt with the smallest balance.


Phase 4: Creditor Communication (Self-Negotiation)


You can manage payment terms yourself to accelerate the process.

Action

Goal & Coaching Tip

1. Call the Highest-Rate Creditors

Call the creditors with the highest interest rates (even though they are not your current focus) and use the Lowering Interest Script to ask for an APR reduction.

2. Ask for a Hardship Plan

If you are struggling, ask for a temporary reduction in the minimum payment. Explain you are committed to paying the debt in full but need cash flow to make your disciplined plan work.

3. Document Everything

Keep a log of who you spoke to, the date, and any agreed-upon changes. Do not trust verbal promises.


Related Reads:

Phase 5: Maintain Momentum (The Roll)


This is the long-term discipline needed to build net worth.

Action

Goal & Coaching Tip

1. Pay Off the Smallest Debt

When the smallest debt is paid off, celebrate the win! You have the momentum!

2. Roll the Payment

(Forced Action) Immediately take the full amount you were paying on the first debt (its old minimum payment + the extra cash) and add it to the minimum payment of the next smallest debt. Your payment is now larger and hits the next target harder.

3. Repeat Until Free

Continue the snowball roll until every debt (except the mortgage, if you have one) is at a $0 balance. This is the moment you transition from debt repayment to fully fund the emergency fund.



You are able to are able to do this and if you would like someone to walk along side of you and encourage you along the way complete the contact form and we can connect.

Comments

Post a Comment

Popular posts from this blog

Beyond the Budget: Cultivating a Safe Space for Money Conversations

Image
  Beyond the Budget: Cultivating a Safe Space for Money Conversations Money. It's one of the most common topics that can spark tension, misunderstanding, and even outright conflict in relationships. We all know we should talk about it, but often, the conversations we have feel more like a battleground than a common ground. Just today, I heard a familiar story unfold. I was at a coffee shop, chatting with a group of friends. One of the men mentioned he’d recently received a raise and was eager to discuss with his wife how they could best use these new funds. He brought it up, hopeful for a collaborative discussion, only to be met with, “I don’t want to make that decision now.” He sighed, resigned, expecting that he’d likely just have to make the decision on his own. His story hit me hard because it echoed a significant failure from my first marriage, one I hope I've learned from deeply. In that relationship, my wife was truly the backbone of our home. She managed the household,...
Read more

Building a Legacy Beyond Wealth: The Power of Biblical Financial Coaching

Image
In a world obsessed with accumulating more, the constant pursuit of wealth can often feel like a treadmill – endless, exhausting, and ultimately unfulfilling. But what if there was a different path? What if managing your money could be about more than just numbers in a bank account, but about aligning your life with a higher purpose? Welcome to the world of Biblical Financial Coaching . This isn't your average financial advice. While it certainly covers practical aspects like budgeting and debt elimination, it does so through the timeless lens of Scripture. It's about understanding that every dollar you earn, save, and spend is an opportunity to honor God and build a legacy that extends far beyond material possessions. What Exactly Is Biblical Financial Coaching? At its heart, Biblical financial coaching is about integrating your faith with your finances. It's a journey that helps you: Understand God's Principles of Money: The Bible has over 2,350 verses on money, ...
Read more

Beyond Riches: How Essentialism Unlocks True Financial Freedom (and Purpose)

Image
  Introduction: The Fleeting Pursuit of Wealth This morning, as I spent time in God's Word, a passage from Proverbs 23 :4-5 resonated deeply: "Do not toil to acquire wealth: be discerning enough to desist. When your eyes light on it. It is gone, for suddenly it sprouts wings, flying like an eagle toward heaven." Have you ever felt caught in the relentless pursuit of more, only to find that wealth, when made the sole focus, can feel incredibly fleeting? It's a powerful reminder that if growing our net worth is our only life goal, we might be chasing something that "suddenly sprouts wings." Investing in What Truly Lasts Proverbs 23:23 offers a profound contrast: "Buy truth, and do not sell it; buy wisdom, instruction, and understanding." This verse challenges us to consider what we're truly using our wealth for. Are we simply accumulating it, storing it in silos, and deriving our self-worth from account balances? Or are we leveraging the blessi...
Read more