Are you ready to get rid of that debt hanging over your head? Perhaps it feels overwhelming, and you are just not sure what to do. Sometimes, you hit a block because you don’t know how to payoff debt. I will share multiple methods that people have used and how you can win at paying off that debt.
Why payoff debt?
Stress Relief-
You owe it to yourself to stop having the weight of debt on your shoulders. It brings unwanted stress into your life. Suer you might be able to make minimum payments now, but what if you lost your job? Or you have a major life change? These things can weigh on a person, so the best thing is to pay down that debt.
Compounding interest
According to Eperian in 2017, the average Student Loa debt is $34,144 and the average credit card debt is $6500. Below are two examples of what your minimum monthly payment would be, how long it would take to pay off, and how much extra you would be paying in interest.
Student Loans
Principal – $34,144 at 6%interest
Minimum Monthly Payment – $660.16
Time to Pay it Completely, – 5 years
Total Paid – $34,144 in principal + $5461 in interest = $39,605
Credit Card
Principal $6,500 at 13%Interest
Minimum Monthly Payment – $80 a month
Time to Pay it Completely – 16 years, 5 months
Total Paid – $6,500 principal + $9250 in interest = $15,750
Use Minimum payments differently
What if you saved that $660.16 each month for 5 years, and you placed it in a stock market fund that returned 6%?
At the end of 5 years you would have =$47,336.00
And if you just left it sit in that same account after 20 years you would have = $151,812.96
What if you used your minimum payments from your credit card.
$80 a month for 16 years would be worth $26,125
And if you just left it sit in that same account for an additional 20 years you would have = $83,784.36
You can use those minimum payments to help fund your retirement. Instead of losing money, you would be letting it work for you!
Debt Payoff Methods
There are two main methods of paying off your debt. Below are the examples of how use each one.
Debt Avalanche (also known as Debt Stacking)
In this method you list your debts in order by the interest rate. While still paying your minimum payments on each loan, you would start putting extra money towards the loan with the highest interest rate.
Here is an example:
Visa – 13% – Balance of $6,500
Mastercard – 11% – Balance of $350
Student Loan – 6% – Balance of $10,000
Auto Loan – 5% – Balance of $7,000
You would start by paying off the Visa as fast as you can and once that loan was paid off, you would start taking the minimum payment for the Visa and along with any extra and start applying ti to the Mastercard. The gain with this method is that you are paying the highest interest loans off first and therefore saving money in interest over the long haul.
Debt Snowball (term coined by Dave Ramsey)
In this method you would start by paying off the debt with the smallest balance, and then move on to the next smallest balance.
Mastercard – 11% – Balance of $350
Visa – 13% – Balance of $6,500
Auto Loan – 5% – Balance of $7,000
Student Loan – 6% – Balance of $10,000
In this example, you would pay off the MasterCard first because the balance is only $350. You would then use the minimum payment for the MasterCard and the extra and start applying to to the Visa. Your gain with using this method is that you are paying off the loans faster at the beginning which usually gives you a boost emotionally.
Which Method Should you Use?
Personal finance is personal. That means that it really is up to your personal preference in which method you want to use. If your personality is one that wants to look at the numbers and save every penny possible, then the Debt Avalanche is for you. If you are a person who wants to feel success as soon as possible, then you might want to try the Debt Snowball.
The secret? It doesn’t really matter. It is all about paying off the debt and moving forward. You need to have a plan and you need to work that plan. So, no matter what plan you choose, no matter how long it takes, it is your plan and you will win at it.
Here is a Free 7 Day Course to Set Goals and Achieve Them.
The Keys to Success for Debt Payoff
Here it is. Summed up in 4 key pieces.
- Know your Numbers
- Make a Plan (Part of your plan should include a budget, and ways to invest your money)
- Work the Plan
- Celebrate along the way
Here are the 6 books that changed my financial life, and helped payoff debt. Check them out!
Do you have a debt payoff story you want to share? Click here to share it with me and be featured on Flip the Fail.
No method would be effective if you won’t have the right discipline and be persistent to pay off your debt on time. I mean, you need to plan ahead for your payment to regain freedom against the bond of debt.
Today, I went to the beachfront with my kids. I found a sea shell and gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.”
She put the shell to her ear and screamed. There was a hermit crab inside
and it pinched her ear. She never wants to go back! LoL I know this is entirely off topic but I had to tell someone!
g he recently posted…g he
You really make it appear so easy with your presentation however I in finding this matter to be really
something that I feel I would never understand. It seems too complicated and extremely broad for me.
I am taking a look ahead for your next post, I’ll try
to get the dangle of it!
g or recently posted…g or
Nice post. I was checking constantly this blog and I’m
inspired! Extremely useful info specifically the last part 🙂 I handle such
information much. I used to be seeking this particular information for a long
time. Thank you and good luck.
g more recently posted…g more
It is not my first time to pay a visit this website, i am visiting this
web site dailly and take nice facts from here all the time.
g https://tinyurl.com/rsacwgxy recently posted…g https://tinyurl.com/rsacwgxy
Do you mind if I quote a few of your articles as long as I provide
credit and sources back to your blog? My blog site
is in the exact same area of interest as yours and my visitors would genuinely benefit from
some of the information you provide here. Please let me know if this okay with
you. Thank you!
http://ecoups.net/groups/cbd-oil-634298103/ recently posted…http://ecoups.net/groups/cbd-oil-634298103/
constantly i used to read smaller posts which as well clear their motive,
and that is also happening with this article which I am
reading here.
hosting services recently posted…hosting services
whoah this blog is excellent i love studying your posts.
Keep up the good work! You know, lots of persons are looking around for this information, you can help them greatly.
website hosting services recently posted…website hosting services
I really like your blog.. very nice colors & theme. Did you design this website yourself or did you hire
someone to do it for you? Plz reply as I’m looking to construct my own blog and would like to know
where u got this from. kudos
best web hosting recently posted…best web hosting
You actually make it seem so easy with your presentation but I find this topic to be actually something which I think
I would never understand. It seems too complicated and very broad for me.
I’m looking forward for your next post, I will try to
get the hang of it!
cheap flights canada recently posted…cheap flights canada
Hey there! I understand this is somewhat off-topic but I
needed to ask. Does operating a well-established website
like yours take a massive amount work? I’m brand new to blogging but I do write in my diary on a daily basis.
I’d like to start a blog so I can easily share my personal experience
and thoughts online. Please let me know if you have any kind of suggestions or tips for brand new aspiring blog owners.
Thankyou!
cheapest airline tickets recently posted…cheapest airline tickets
This is the right web site for anyone who really wants to understand this topic.
You realize so much its almost hard to argue with you (not that
I personally will need to…HaHa). You certainly put a brand new spin on a
topic that has been written about for years. Wonderful stuff, just wonderful!
web hosting services recently posted…web hosting services
I know this web page provides quality depending articles or reviews and other data,
is there any other web site which provides these kinds of things
in quality?
web hosting companies recently posted…web hosting companies
It’s hard to find educated people for this subject, however, you seem like you know
what you’re talking about! Thanks
website hosting companies recently posted…website hosting companies
I was curious if you ever considered changing the layout of your blog?
Its very well written; I love what youve
got to say. But maybe you could a little more in the way
of content so people could connect with
it better. Youve got an awful lot of text for
only having 1 or 2 pictures. Maybe you could space it out better?
web hosting reviews recently posted…web hosting reviews
Thanks very nice blog!
cheap flights recently posted…cheap flights
Very good post. I will be dealing with many of these issues as well..
3aN8IMa cheap flights
cheap flights recently posted…cheap flights
Appreciate the recommendation. Let me try it out.
cheap flights 3gqLYTc
cheap flights recently posted…cheap flights
I like it when individuals come together and share thoughts.
Great website, stick with it!
cheap flights recently posted…cheap flights
Hi! Quick question that’s totally off topic.
Do you know how to make your site mobile friendly? My web site looks weird when viewing from
my iphone4. I’m trying to find a theme or plugin that might
be able to correct this problem. If you have any suggestions, please share.
Thank you! 2CSYEon cheap flights
cheap flights recently posted…cheap flights
Greetings! I know this is somewhat off topic but I was wondering which blog platform are you using for this website?
I’m getting tired of WordPress because I’ve had problems with hackers and I’m looking
at options for another platform. I would be awesome if you could point me in the direction of a
good platform.
cheap flights recently posted…cheap flights
Pretty nice post. I just stumbled upon your blog and wanted to say that I’ve truly
enjoyed browsing your blog posts. In any case I’ll be subscribing to your feed and I hope
you write again very soon!
cheap flights recently posted…cheap flights
Does your website have a contact page? I’m having
problems locating it but, I’d like to shoot you an e-mail.
I’ve got some ideas for your blog you might be interested in hearing.
Either way, great blog and I look forward to seeing
it grow over time.
cheap flights recently posted…cheap flights
I will right away seize your rss feed as I can’t to find your email subscription hyperlink or e-newsletter
service. Do you have any? Please allow me realize so that
I could subscribe. Thanks.
black mass recently posted…black mass
Hi to all, how is everything, I think every one is
getting more from this website, and your views are pleasant in favor of new people.
black mass recently posted…black mass
Heya i’m for the key time here. I found this board and so i in locating
It truly useful & it helped me to out much. I’m hoping
to provide something back and help others including you
aided me.
my page – SheaBBurlile
SheaBBurlile recently posted…SheaBBurlile
I’ve been exploring for a little for any high quality articles or
weblog posts in this sort of house . Exploring in Yahoo
I at last stumbled upon this site. Studying this
info So i’m glad to express that I have an incredibly good
uncanny feeling I came upon just what I needed.
I most definitely will make certain to don?t put out of your mind this site and
give it a glance on a continuing basis.
webhosting recently posted…webhosting
I like the helpful information you provide in your articles.
I’ll bookmark your blog and check again here regularly.
I am quite certain I will learn many new stuff right here!
Best of luck for the next!
best hosting recently posted…best hosting
When someone writes an component of writing he/she keeps the thought of your user in their/her brain that how the user can know about it.
Thus that’s why this bit of writing is outstdanding. Thanks!
My page; EdgarYMoffet
EdgarYMoffet recently posted…EdgarYMoffet
You actually make it appear so easy along with your presentation however I to find this matter to be really one
thing which I feel I might by no means understand. It seems too complex and very extensive for me.
I’m having a look ahead on your next submit, I
will try to get the dangle of it!
Candra recently posted…Candra
I simply couldn’t leave your site prior to suggesting that I really loved
the usual information a person supply on your guests?
Is gonna be back regularly to investigate cross-check new posts
DHL折扣 recently posted…DHL折扣
Very good information. Lucky me I recently found your
blog by chance (stumbleupon). I’ve book-marked it for later!
Mira recently posted…Mira
Your style is so unique compared to other folks I have read
stuff from. Thanks for posting when you have the opportunity,
Guess I’ll just bookmark this web site.
Zane recently posted…Zane
I am extremely impressed with your writing skills as well as with the layout on your blog.
Is this a paid theme or did you customize it yourself?
Anyway keep up the excellent quality writing, it is rare to see a nice blog like this one these days.
Rudolf recently posted…Rudolf
I am genuinely delighted to read this weblog posts which contains
lots of useful facts, thanks for providing such data.
web design recently posted…web design
Can I just say what a comfort to find an individual who truly understands what they’re talking
about over the internet. You actually understand how
to bring a problem to light and make it important.
More people really need to read this and understand this
side of the story. I can’t believe you’re not more popular
given that you certainly have the gift.
http://systemicfiscalreform.org/ recently posted…http://systemicfiscalreform.org/
whoah this weblog is magnificent i like reading your articles.
Keep up the good work! You already know, lots
of persons are looking round for this information, you can aid them
greatly.
Alan recently posted…Alan
Thanks for your personal marvelous posting!
I truly enjoyed reading it, you are a great author.I will be sure to bookmark
your blog and may come back down the road.
I want to encourage one to continue your great posts, have
a nice weekend!
Susanna recently posted…Susanna
Please let me know if you’re looking for a author for your site.
You have some really great posts and I feel I would be a good asset.
If you ever want to take some of the load off,
I’d absolutely love to write some content for your blog in exchange for
a link back to mine. Please blast me an e-mail if interested.
Thank you!
vacuum glovebox recently posted…vacuum glovebox
Wow that was unusual. I just wrote an very long comment but after I clicked submit my comment didn’t appear.
Grrrr… well I’m not writing all that over again. Anyway, just wanted to say fantastic
blog!
Skye recently posted…Skye
I am extremely inspired together with your writing
skills and also with the layout to your weblog. Is this a paid subject or did you customize it your self?
Either way keep up the excellent quality writing, it’s rare
to see a nice blog like this one today..
Mayra recently posted…Mayra
Thanks for sharing such a nice thinking, piece of writing is good, thats why i have read it completely
Brittany recently posted…Brittany
My family members every time say that I am wasting my time here at web,
however I know I am getting know-how daily by reading such good articles or reviews.
Renato recently posted…Renato
Thanks for the auspicious writeup. It if truth be told
was once a entertainment account it. Glance complex to more introduced agreeable from you!
By the way, how can we keep up a correspondence?
Alexis recently posted…Alexis
Wow, fantastic weblog layout! How lengthy have you ever been running a blog
for? you make running a blog glance easy. The overall glance of your web site is fantastic, as neatly as the content material!
回国行李寄送 recently posted…回国行李寄送
Thank you for the auspicious writeup. It in fact was a amusement account it.
Look advanced to more added agreeable from you!
By the way, how could we communicate?
Collette recently posted…Collette
Everything is very open with a precise clarification of the challenges.
It was definitely informative. Your site is extremely helpful.
Thank you for sharing!
Emilia recently posted…Emilia
I got this website from my friend who informed me concerning this site and now
this time I am visiting this web site and reading very informative posts here.
Brandon recently posted…Brandon
I loved as much as you’ll receive carried out right here.
The sketch is tasteful, your authored material stylish.
nonetheless, you command get bought an impatience over that you wish be delivering the following.
unwell unquestionably come further formerly again since exactly the same nearly very often inside case you shield this increase.
Mattie recently posted…Mattie
What’s up i am kavin, its my first time to commenting anywhere, when i read this post i
thought i could also create comment due to this brilliant article.
PDFquestions.com recently posted…PDFquestions.com
Hello my friend! I wish to say that this article is amazing, great written and come with approximately all
important infos. I would like to look more posts like this .
Lenora recently posted…Lenora
Wow, this piece of writing is fastidious, my sister is analyzing
these things, thus I am going to let know her.
Bernadette recently posted…Bernadette
I read this paragraph completely regarding the resemblance of most up-to-date and previous technologies, it’s remarkable article.
Arielle recently posted…Arielle
What’s up, its fastidious article about media print, we all be aware of media is a impressive
source of information.
Lila recently posted…Lila
Do you mind if I quote a few of your posts as long as I provide credit and sources back
to your site? My website is in the very same niche as yours and my visitors would
certainly benefit from a lot of the information you provide here.
Please let me know if this ok with you. Thanks a lot!
Johnette recently posted…Johnette
Heya i am for the first time here. I came across this board and I find It truly useful & it helped me out much.
I’m hoping to give something again and help others such as you
helped me.
Elliott recently posted…Elliott
When I initially commented I appear to have clicked on the
-Notify me when new comments are added- checkbox
and now each time a comment is added I receive 4 emails with
the same comment. Perhaps there is an easy method you can remove me from
that service? Appreciate it!
Margery recently posted…Margery
Hey! I could have sworn I’ve been to this website before but after checking through some of the post I realized it’s new to me.
Anyways, I’m definitely delighted I found it and I’ll be book-marking and checking back often!
Nathan recently posted…Nathan