The big things you want and value in life, your home, your car, maybe your dream venue for your wedding, can potentially add to your debt. Do you feel like you have been intentional about the debt you have taken on? Carefully planned debt can add value to your life as long as you are prepared to manage it, spend within your means, and make a plan to pay it off no matter how intimidating the total balance may be.
Pay The Smallest Balance First – The Snowball Method
Focus on one debt at a time. Take your smallest balance and apply larger payments until that debt is completely paid off. After that, you can apply those larger payments to the next debt. This is often referred to as the snowball method. Before you know it, the days of debt freedom will be in sight. Our personal Finance Tool has a dedicated Debt section to organize, manage, and pay off debt.
7 Easy Steps to Paying Off Debt:
- List the balance, minimum monthly payments, and interest rates for each debt
- Make your minimum payments on time
- Snowball your payments – focus on paying the smallest balance first
- Make saving a top priority to avoid falling further into debt
- Adjust your budget to pay more than the minimum payments
- Research interest rates to make sure you have the lowest rate
- Consider consolidating credit card debt into a personal loan or home equity loan with a lower rate and a set monthly payment
Have questions or looking for a little help with your debt management plan? Our Financial Wellness Coaches, Erika Taylor and Lesley Warn, are available to chat about all things money management. Get in touch with them.