Quote:
Originally Posted by bakerr6
Always pay downy our high interest debt first and work your way down from there.
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PS- Most people who have made it would tell you to pay down your lowest debt first, regardless of interest rate. It's the idea of "seeing" things get paid off that gives people the ambition and will to get them attacking debt aggressively (budgeting REALLY comes in handy here). You pay on something that take some years to pay off, there is not a tangable success…you still have the payments. You knock out a $2000 credit card in a couple months, add that payment to your next biggest debt, you then pay that one off quicker, and roll both payments into the third biggest debt and so on. Sounds counterproductive, but have you ever heard of "snowballing" your debt? It works. I'm living proof of it. We paid our civic off 3 years early using this idea after paying off 5 credit cards!
I always suggest to my clients to "snowball" starting with their lowest debt and working to their highest. Learned this from Dave Ramsey a couple years ago and it has had amazing success. The calls are always fun when I have a client call me up telling me they just knocked out their third or fourth credit card.
(financial advisor here, by the way)
