What’s the Best Debt Payoff Strategy for You?

Debt is a problem for many people.  The article below by Abby Hayes gives some excellent ideas for attacking debt!

Steve

How to Pick a Debt Payment Strategy You Can Live With

You know the old saying “failing to plan is planning to fail”? That doesn’t just apply to college tests and job applications. It also applies to paying off debt.

So before you start throwing money at your debt haphazardly, see which of these three debt payoff methods will work best for you.

The Debt Snowball

With the debt snowball method, you pay off your debts in order from smallest balance to largest balance, regardless of interest rate or monthly payment.

So you pay the minimum balance on all other debts, but pay whatever extra you can on the smallest debt to get it paid off faster. Then, each time you pay off a debt, you add the payment you were making on it to the monthly payment for the next debt you pay off. Each time you pay off a debt, you’re throwing even more money at the next debt down the line. By the time you get to your largest debt, you’re making very large monthly payments.

via What’s the Best Debt Payoff Strategy for You? | Credit.com Blog.

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An excellent, and balanced, discussion of debt from the New York Times.  My belief is that debt, if used judiciously, can be a powerful tool, and if used incorrectly can be very dangerous. Steve =====