Basic strategies for paying off debt

One of the best ways to keep money now is to not have any debt. While there are many strategies for getting out of debt, the following are a few strategies you may want to consider implementing when paying off debt.

Avalanche Method

This method suggests that you use any extra money to pay off the debt with the highest interest rate.

• Make a list of all your debt from the debt with the lowest interest rate to the debt with the highest interest rate.

  
  

• Make the minimum payments on each debt, except the one with the highest interest rate. Apply any extra money to the debt with the highest interest rate.

  
  

• Once you have paid off the debt with the highest interest rate, repeat the process, until all debt is paid off.

Dave Ramsey’s Snowball method

This method suggests using any extra money to pay off the smallest debt.

• List your debts in order from the smallest debt to the largest debt.

  
  

• Make the minimum payment on all debt except the smallest debt.

  
  

• Use any extra cash to pay off the smallest debt as fast as possible.

  
  

• Once the smallest debt is paid off use the money you were applying towards the smallest debt to pay off the next smallest debt and repeat the process until all debt is paid off.

Set Up a Payment plan/Negotiate with creditors and lenders

• Set up a repayment plan with your creditors. Setting up a repayment plan can help in getting debt paid off fast and can help avoid having your debt pile up. While some payment plans may come with interest, some payment plans can be set up with very affordable payments and without added interest.

• Negotiating a settlement where the lender will allow you to settle the debt for less than you owe, is another way to get debt paid off fast while saving money.

Make a Plan, Have a Strategy!

The fastest way to get yourself out of debt is to create and implement a strategy. It doesn't matter what the strategy is as long as you have a strategy that works for you. Without a strategy your debt will continue to sit and pile up; but with a plan and being consistent in making payments your debt can be paid off sooner than you’ve expected.

Feel free to share your thoughts in the comments. Don’t forget to subscribe for more blog topics. You can also check out the latest blog topics in the blog tab.

Discipline is key 🗝️

#KeepMoneyNow