Paying off Debt

Before I researched the best way to get out of debt, I would pay extra on every debt that I possibly could which was great in theory but was not bringing me to the point I hoped to be quickly enough. I was working on my debts the same way I was working on other things in my life and that was without real purpose. You see I wasn’t really making any great strides because I wasn’t focused. Once I became focused on one particular debt I began to put my efforts there and saw results.

One of the best ways I have found to pay off debt is by focusing your money on the debt that has the lowest balance.  For example, if you have a debt with a balance of $275 and one for $780 it would be best to focus on the lowest balance of $275.  Once you pay off this balance (and it should be done fairly quick), you would take the payment you were making on the low balance and combine it with the next lowest balance payment.  Before you know it, you will have paid off several small debts and will be on your way to getting out of debt.  While paying off our debt,  I really gained confidence once I saw the debts being paid off.  It really works and I highly recommend this method.

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3 thoughts on “Paying off Debt

  1. Hi Alison. I have read your blog before – a while back. Now that I have internet again, I can play catch up on your entries. This could take a while. However, it is worth it.

    Reading this article, reminded me of what I recently did. I have a notebook that has all my debts written down. I went a step further. What I did, I calculated how much I would pay on the debts I owed, using the frequency of getting paid – which is every two weeks. Then, I calculated how much I needed to pay on my debts, bi-weekly, if I wanted to pay them down in a certain amount of time.

    Example: If I wanted to pay off $73.75 in one month, I would have to pay $36.88 every two weeks. I went down the line, repeating the steps.

    It helped me set my financial goals.

    I cannot wait to read the rest of your entries.

    Like

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