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Get Out of Debt

When you are in debt, you pay more than the cost of the original purchase. You also have to make interest payments that can substantially cut into your income.

Debt means your money isn’t working for you, it’s going towards paying that interest. It creates a financial burden and limits the choices that you can make.

Paying off debt, by contrast, allows you to take that money and redirect it toward the things that are important to you. You can put it toward other financial goals, such as saving for education, creating a retirement fund, traveling, or improving your living situation. You can start a business. You can begin investing it, allowing you to grow your wealth and create more financial stability and independence.

If you have a lot of debt and are feeling overwhelmed, you can use the snowball method to control the debt repayment process.

  1. Pay only the minimum payment on all your debts except the smallest one.
  2. Put whatever extra money you have toward paying off the smallest debt.
  3. Once it’s paid off, move onto the next smallest.

As you pay off your smaller debts, you’ll have more money available to pay off your larger debts. This momentum helps you focus your efforts and get out of debt more quickly.

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