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Discussion in 'Money Talk$' started by SaggyWoman, Apr 2, 2013.
What has successfully worked for you to get out of major debt?
Understanding needs and wants - TRUE needs and wants - and then to stop spending on wants.
A lot depends on how far in and what type of debt.
List all your debts.
1. Put them in numerical order, the highest first the lowest last.
2.Keep making payments.
3. If you have any extra money, pay off the lowest debt first and as fast as possible by using the extra money as additional payments.
4. Take the payment you have been making on the lowest one and add it to the new lowest debt.
5. As soon as that one is paid off, take the two payments and add it to the new lowest debt.
6. Keep doing this until you are out of debt.
7. When all the debts are paid off, take those payments and pay yourself by putting them into some type of savings or investments. Do not increase your spending!
In the future never go into debt for anything that depreciates in value.
It is my belief that as a Christian the savings are not just for self, but also to help others that God brings into your life who are in need.
Personally, I am following the democrats plan for debt reduction. I am borrowing and spending. It will catch up one day but in the meantime who cares?
May be best to pay off loans with the highest interest rates first
Not a bad idea Salty.
I put from the lowest to the highest and pay off the lowest first because psychologically it is very satisfying to see a debt erased.
To do the snowball effect, you list your debts from lowest to highest and pay off the lowest debt first, while making minimum payments on the rest. When the lowest is paid off, use that money that was going towards that debt and add it to the next debt's minimum and pay off that debt now with the greater payment. Once that is paid off, take the money from the first and second debt and add it to the payment for the third and get that paid off. By the end, the largest debt should be able to be addressed well because you have the amounts of the minimum payments of all the others going into it as well. It's a very effective system.
Both points are valid
I suppose its how you see the glass - half full or half empty