The Fastest Way to Pay off Debt

Getting out of debt is the dream of millions of Americans every year. But sometimes the reality of becoming debt-free is still in the dream phase. Some steps are more effective than others in tackling this huge financial situation.

Before we list those steps, it’s important to realize how pervasive the debt problem is in our country. Debt is accepted as a normal part of life in America. Carrying a credit card and having a student loan or even a car loan are all considered part of being an American.

It is possible to live debt-free, however, and there are many, many people who choose this lifestyle with great success. Debt steals your income, so claim back your money and follow these steps to live debt-free!

List out all of your debts from smallest to largest, regardless of the interest rate. This debt should include everything but your house – things such as payday loans, credit cards, personal loans, student loans, etc. Then begin attacking the smallest debt first.

Some might ask, doesn’t paying off your highest-interest debt first make sense mathematically? The answer is yes, it does. But in this strategy math is not the main issue; behavioral modification is. Personal finance is almost all behaviorally driven, so taking this approach is most effective in the long run.

Once you implement this strategy in your life, you will start with some quick and simple “wins.” As this process continues, you will gain momentum, motivation, and ultimately victory!

Advertisements

About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
This entry was posted in Debt, Personal Finance, Planning Strategies and tagged , , , , , , , , , , , , , , , , , . Bookmark the permalink.