This and That

Money Monday: Your Debt

Posted on: September 12, 2011

Do you want to save more?

Do you want to have more money in your pocket?

Then you NEED to pay off your debt. Think of how much more money you would have if you paid off all your monthly payments.

For example:

$75 on the credit card,

$225 on the car,

$150 on the student loans, and

$50 on the Nordstrom card.

A total of $500 on monthly debt payment.

$500 extra you could be adding into your savings account each month.

$500 extra you could have in your pocket each month.

To get control of your money and to start being financially successful you need to get out of debt. Now!

Paying minimum payments each month is not enough and won’t get you closer to being without debt. You have to really get motivated and committed to getting these debts paid off.

How do you get out of debt? What plan can you implement to get you on track? Here are two ways from the two financial gurus I listen to. Personally I think either way is fine, which ever gets you the most excited.

Suze Orman at www.suzeorman.com

If you listen to Suze Orman, as many people around the world do, she would say to write a list your debts in order from highest interest rate to lowest and pay them off in that order. Her theory is paying off the highest interest rate payment first will save you the most money in the long run. The downside to this is that the debt with the highest interest rate may also have the highest amount due, so it could take you a a while to pay this all off, depending on how much extra money you can put towards it every month.

Dave Ramsey at www.daveramsey.com

Dave Ramsey would tell you to list your debts in order from smallest total amount to largest and pay it off in that order, don’t worry about the interest rates. The reason is paying the smallest debt first will make you feel empowered and that you can be in control of your money. Of course this means that for a while your biggest debt keeps getting bigger while you pay the other debts off, but the hope is the habit of paying off debt will motivate you to keep the ball rolling until the end.

Both gurus will tell you to rollover the monthly payment of paid off debt towards the next debt. This will increase the amount you pay on each consecutive debt and increasing the speed you are paying them off.

Hubby and I followed Dave’s method, paying our smaller debts off first and now we only have one left, the car. My goal is to have it paid off by the end of this year and then we will do a happy, happy, happy dance to ring in the new year!

So join us. Pay off your debt and see your income sky rocket!

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1 Response to "Money Monday: Your Debt"

[…] For starters, hubby and I hit our financial goal of paying off our car loan by December 31, 2011; which means we now have NO DEBT!!! No credit cards, no loans, no extra payments, nothing! All our money is ours and all our stuff is ours; the bank doesn’t own any part of  our lives! The feeling I have is freedom, excitement, and a massive amount of joyful expectation. (If you have never thought you could be debt free I encourage you to check out Dave Ramsey at daveramsey.com and listen to his radio show at 980 AM from 11am-2pm. Dave teaches the biblical prescriptive on money; how it’s Godly and smart not to be in debt). Read my post about Dave here. […]

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