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You can’t borrower your way out of debt. There’s only one way to get rid of it. Pay it off.
1) What where do I start?
Stop borrowing money. Send your Visa & Master Card divorce papers.
2) Which debt should I pay off first?
Smallest balance first, regardless of interest rate. Pre-paying neutralizes compounding interest on revolving debts.
Take min mo pmt, add 10% of your net pay. Divide that number into the balance of the debt. Divide that by 12. That’s how many months until you pay the debt off.
Example: $1,000 balance. $20 min pmt = 50 mo or 4 yrs to payoff. That doesn’t account for revolving interest, which takes longer.
$20 min mo pmt plus $60 extra. $1,000 balance divided by $80 = 12.5 mos to payoff or 1.5 yrs.
3) What about interest rates?
They’re nothing but rent payments. Interest paid is rent for the use of someone else’s money. They borrower it at, say .50% and they’re lending it to you at 4.5% for house, up to 29% on credit cards. Who’s getting the best deal in that equation?
Closing:
Borrowing money is fast and convenient. Ask why are you doing it your entire life? When does it stop?
Resource:
Piece of paper, something to write with, and calculator.
Get in touch. Podcast page. email or voicemail button.
Coaching is available.
I’m Greg Whitaker reminding you:
Get Your Mind Straight. Get Your Money Straight
Debt Shepherd 2017, All Rights Reserved
