Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I'd like to get some opinions on my financial situation. I don't believe its all that bad compared to some... just wondering what the best direction to go in is....
I have read conflicting advice. Sometimes it is best to pay more on one debt to eliminate them one by and one... or ... pay equal amounts to reduce all balances?
I'd like to get some opinions on my financial situation. I don't believe its all that bad compared to some... just wondering what the best direction to go in is....
I have read conflicting advice. Sometimes it is best to pay more on one debt to eliminate them one by and one... or ... pay equal amounts to reduce all balances?
I think I would "work" on the one with the highest interest rate first. That's just my .02. Someone else may have a better solution.
You nailed it. Put any extra money toward the balance with the higher interest rate first. Once that debt is retired, put the extra money toward the next highest rate and so forth. You'll wipe away your debt quickly with this approach as long as you maintain personal discipline.
I'd like to get some opinions on my financial situation. I don't believe its all that bad compared to some... just wondering what the best direction to go in is....
I have read conflicting advice. Sometimes it is best to pay more on one debt to eliminate them one by and one... or ... pay equal amounts to reduce all balances?
Location: Georgia, on the Florida line, right above Tallahassee
10,471 posts, read 15,844,982 times
Reputation: 6438
Pay the minimum amount on the account with the lowest rate. Take the money you would've paid on the other lower interest rate accounts and pay all that money on the loan with the highest interest rate.
When you have that loan paid off, take all of the money you have been paying on it, and then pay off the next lowest interest rate account. Wash, rinse, repeat.
OR.
If you can consolidate again...at a lower rate...get all of them consolidated and pay it off that way.
No doubt... This is a house payment (almost). However, always pay the highest interest first. If you never get further in debt than this, you're doing better than the average. Actually, you're doing better than the majority.
(1) As mentioned above, pay the highest rate off first. Better to get rid of high interest rates before low interest rates.
(2) Alternate thought, pay off the lowest balance first and then when its paid, take what you were putting towards that and apply it to the next lowest balance. You keep paying the same amount toward debt until its all paid off. By attacking smaller balances you get rid of lenders, have a lot of great feeling with a debt going away.
Pure dollar and cents will put you to option #1. I know many financial counselors who factor in their experiences with clients that give a huge psychological lift with option #2 and find they actually stick to the plan better.
It certainly could be considered that way, depending on the circumstances. What if they're a struggling college student living on a part-time income? What if it's a single-parent family trying to get by on one small income?Instead of poking fun, I think this person should be commended for trying to get rid of it before it becomes a problem.
I appreciate all your responses. Thanks RoaminRed!
I think Dave1215 has the right idea for me with #2. The boost from eliminating the lowest first. One less bill to pay a month and feeling like your getting somewhere with your plan.
I know its not alot of debt but it really eats me up for some reason. I would say I earn a medium income and have savings and investments but I don't want to just pay it from savings. I think thats just too easy. If I know I need to pay it from wages it helps keep me on a budget and continue to save.
I appreciate all your responses. Thanks RoaminRed!
I think Dave1215 has the right idea for me with #2. The boost from eliminating the lowest first. One less bill to pay a month and feeling like your getting somewhere with your plan.
I know its not alot of debt but it really eats me up for some reason. I would say I earn a medium income and have savings and investments but I don't want to just pay it from savings. I think thats just too easy. If I know I need to pay it from wages it helps keep me on a budget and continue to save.
Thanks again!
The key to #2 is when that first bill is paid off, to keep making the same level of payment, just transfer it to the next smallest debt.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
