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?
Which has the highest interest rate?
So for this example it’s simple. Work to pay off the Credit Card first.
Knock the Debt Down,