Everyone has some kind of debt. Whether it’s your home or auto loans, or credit cards, it’s a necessary part of life because no one has a ton of extra cash lying around to buy things outright. Unfortunately, the trend is up, and our members are feeling loaded down with high-interest loans or large amounts of credit card debt that seem impossible to pay off, especially when the ironwork trade fluctuates so much.
That’s where our Debt Knockdown Challenge can help you knock out that stress for good. We’ve pulled together our top three strategies to help you pay off your debt and get back to living the good life. All you have to do is pick one that fits your lifestyle and budget, stick with it, and watch your hard-earned money make its way back into your pocket. Let’s get ready to rumble…
BEST: The Snowball Method – Win Fast, Build Momentum
Instead of focusing on interest rates, the Snowball Method focuses on small wins. You list your debts from the smallest balance to the largest. Pay the minimum on everything else, but every extra cent you have goes toward the smallest debt first. Once your small debt is gone, that monthly payment is freed up, and you can put that towards the next debt on your list. It builds momentum, and that success gives you the positive reinforcement you need to keep going.
Get Started
- Make a List – write out every debt you owe, from the smallest balance to the largest (except your mortgage if you have one).
- Attack the Smallest Debt First – use any extra resources to pay it off (think overtime pay, extra savings, tax refunds).
- Keep Paying those Minimum Balances – don’t neglect your other debt, continue to make your minimum payments on everything, but the small debt you’re working to pay off first.
- Keep the Momentum Going – once you’ve paid off that smallest debt, add that to the minimum payment that’s next on your list.
BETTER: Avalanche Method – Save the Most on Interest
Cut down what interest takes from you by paying off debt with the highest interest rate first. Similar to the Snowball Method, you throw every extra dollar towards your high-interest debt while you continue to make minimum payments on your other debt. By reducing the balance, you reduce how much interest is being added to it, so you can pay it off faster. Once it’s paid off, use that extra money to pay off debt with the next highest interest rate. This lets you shrink debt faster and keep more of your hard-earned money.
GOOD: Get a Loan – Simplify, Combine, Conquer
Start by combining multiple balances into one loan while paying off the rest. Instead of tracking different rates and due dates, you focus on one clear payment each month. If the rate is lower, more of your money goes toward the balance instead of interest. You take control with a fixed term, giving you a real end date you can see coming.
