It was a long, hard, ugly battle but you have finally gotten rid of the credit card balances. Yes, it was painful. Hell yeah, it was hard unforgiving work. But guess what? You have just knocked out a set of bills and each month you are hundreds (if not thousands) of dollars richer for it!

You never have to worry about those types of bills again. You are no longer giving away money. You now have cash -- more money to over-stuff your retirement fund, emergency fund or "stuff happens" fund.

OR . . .

You can get rid of those car payments.

STEP 3: Owning your vehicles free and clear

Let's face it, car payments of 5 to 8 years is ridiculous. Buy a new car today and in 36 months not only are you still making payments . . . you are paying for repairs. Two years later, the warranty runs out and the bigger repair costs come around (you think the manufacturer hasn't timed costly auto repairs down to the WEEK of the breakdown? -- please!)

By the fifth year you are going to the car dealership to buy another new car, even though you have 3 more years of payments to finish on the old car. Car debt is becoming the true meaning of revolving credit, because it's just like a revolving door . . . it never stops spinning you around, and around, and around. There are some people that believe that having a car payment their whole life is a given. . . an expectation of adult life.

Don't get caught in this trap . . . this is (again) another instance were you are just giving your money away. Money you could use to better your own life.

Take the monthly amount you have been paying toward credit card balances and use it to quickly pay off the cars. Then, when you are done doing that set aside $100 a month into a "car account." This can serve as your maintenance account that will keep your car in fine working order so you don't have to buy a new car until much, much later -- hopefully, when you can pay for it without credit.