Carnival of Debt Reduction

Here are some submitted articles on debt reduction:

• Jackie from Money Crush posted an article on the snowball method over at the Pay Off Debt App blog.
• Debt Donkey doesn’t agree that the FICO score is the most important number in life as he gets rid of his debt.
• My Journey To Millions reveals his favorite thing about paying down debt.
• Yes I Am Cheap is backsliding on the debt, but has a plan!
• PT Money tells about a guy who paid down $45,000 in debt delivering pizza.
• Canadian Finance Blog gives some tips on getting out of credit card debt.

Have a great week!

It’s spring. It’s winter. It’s summer. It’s spring. It’s winter again. I wish the weather would make up its mind.

Here are this week’s debt-reduction-related posts:

• PT Money asks whether it’s always a good idea to pay off your car loan early.
• One Money Design comments on the connections in the Bible between debt and slavery.
• Canadian Finance Blog lists common mistakes people make when trying to get out of debt.

Thanks!

Some of us got a day off today … here are this week’s debt-reduction related posts:

• One Money Design has some ways to make getting out of credit card debt easier.
• PT Money gives some tips for staying motivated during debt reduction.

Thanks!

Regardless of how you slice and dice things, paying off consumer debt takes a huge amount of discipline. It’s usually far harder — and far less fun — to get our of debt than it is to get into debt. (This isn’t true in all cases, of course; not everyone gets into debt because of reckless shopping. Some times bad things happen.)

To get rid of large (five- or six-figure) consumer debt in any reasonable time takes sacrifice to make those extra payments. Extra payments will speed the debt reduction process along, regardless of where the payments are made, because extra payments mean less interest gets charged to those accounts.

But, the $64,000 question is: Which debt should be paid off first? (If the debts are large enough, it could be a $64,000 question!)

There are pros to slaying a dragon quickly by paying off the lowest balance first.  But there are also pros to taking the longer road, which is to pay off the highest interest rate first. Taking this route means (possibly) that getting rid of the first debt will take longer (if the highest-rate debt is not also the one with the smallest balance) but it means that the interest savings will be the highest.  Paying down an 18% debt over paying down a 9% debt results in twice the accumulated interest savings.  It gets everything to zero with the least financial pain.

But again, in the grand scheme, it doesn’t matter which debt gets paid off first.  The important thing is that they all get paid off eventually.

Here are this week’s lovely articles on debt reduction:

• Momvesting explains how to remove credit card debt the stubborn way.
• Canadian Finance Blog admits that it’s tough to stay motivated when paying down debt.
• No Credit Needed hits debt reduction inspiration from a number of angles.

Thanks!