Debt Got You Down? Part 2

If you’re suffering under debt, stick close and learn. If you missed the last post read: http://www.samcarrara.com/marketing/debt-got-you-down/

Here we go… Part 2

Now that you’ve listed out your debt… You did do that right? Which debts do you pay off first? Here are two things to keep in mind:

  • Pay off small debts– Pay off the smallest one and then move on to successive ones. This gives you a sense of accomplishment by being able to mark debts off your list.
  • Pay off higher interest rate debts– Start with the highest interest rate debt before lower ones.

Let’s make an example chart of debts:

Type Amount Owed Monthly Payment Interest Rate
Home Mortgage $ 79,000 $ 905 7.3%
2nd Mortgage $ 13,575 $ 251 6.3%
Car Loan $ 14,289 $ 316 2.9%
Credit Card   $ 7,300 $ 609 18.4%

 

 Which has the lowest amount due?

 Credit Card

 Which has the highest interest rate?

 Credit Card

So for this example it’s simple. Work to pay off the Credit Card first.

Knock the Debt Down,
Sam Carrara

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Saturday, January 19th, 2008 Finances

1 Comment to Debt Got You Down? Part 2

  1. This post giving answer for the question “Which debt should I payoff first?”.And it explains a lot of things.I think the table given here will be helpful to them who have debts,

  2. Tylor on October 8th, 2009

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