Eliminating debt is hard. You have to be disciplined and strategic in order to pay down your debt and deciding which method to use is even harder. Should you pay off the higher interest rate first or should you pay off the lowest balance first.
Many financial gurus such as Suze Orman recommend paying off the highest interest rate first, is the best when eliminating debt then moving to the next highest interest rate and so on.
Other financial gurus such as Dave Ramsey recommend paying off the lowest balance first when eliminating debt, then moving up to the next lowest balance and so on until you’ve paid off all of your debt. Yes you are paying more in interest but you are seeing your debts eliminating faster… helping you keep your motivation.
What’s your preferred method?
As for me, I personally like Dave Ramsey’s method. It’s like dieting… If I’m on a diet, I want to make sure it’s working and seeing my debt eliminating is like that little bit of weight dropping off.
The key with any “diet” is to ensure you continue at it! Losing weight isn’t easy neither is eliminating debt. But with proper planning and discipline it can be done!
Is eliminating debt on your goals this year? What steps are you taking in eliminating your debt?
Love this post? Check out my other post: I could have saved 50% while eating out!