DEBT

"Debt is the slavery of the free." - Publilius Syrus

The point of this article isn't to explain what debt is, you already know what debt is.

The plan is how to best go about ridding yourself of debt. All debt. Forever. Before you plow in you need to be in a position to even be able to pay off debts in the first place.
In simplest terms, debt handcuffs you. 
It acts as a roadblock to building wealth.
 It robs your future self of a life of unlimited abundance, only to replace it with a future of what could have been.
Debt is nothing more than building wealth in the wrong direction.

Now that you're committed to a debt free existence, it should be a permanent break with debt. 
As in no more and never again.
Before we go into full attack mode there are a few things we must address first.

It all begins with our monthly budget. 
Your budget has to be complete and accurate to every month with no surprises.

Next you're going to list out every single debt.
 Every one of them. 
Take note of the relevant factors like the size of the debts, the interest rates, and other important details.
Now is the time to IMMEDIATELY payoff any extreme high interest short-term loans (i.e. Payday loans, kwick kash,etc).

 No matter how small they may be, get rid of them.
When it comes right down to it, There's two generally accepted methods to paying off the rest of your debts.

The avalanche method:
This method employs a mathematical approach to paying down debt Under the avalanche method you take all your bills, regardless of how large or small, and pay them off one by one according to that particular debt's interest rate. 

Highest first.
 There are pros and cons to this method.
 As there are to any repayment plan.

Pros include:
You will, once paid off, have paid the least amount of total interest possible.
This method is, by definition, the fastest possible way to get out of debt.

Cons include:
Your payment is strictly determined by the highest interest rate. 
This could mean that it might, at least initially, appear to be making little progress. 
Because of this some might find it difficult from becoming discouraged and become susceptible to quitting altogether.

The debt snowball method:
This method places an emphasis on what's easiest for most people.
Using the snowball method you organize all your bills and pay them off, again one at a time, from smallest debt to largest.
Interest rates are not factored in at all. 
Merely pay the smallest debt first and you payoff your way to the largest debt.   

Pros include:
Most borrowers will see progress much faster in most cases.
With smaller and quicker victories most people find it easier to continue on their debt elimination plan with a lower chance of quitting.

Cons include:
 Although you will see more progress up front, it will generally take longer than the avalanche method.
By the time you pay off your final debt you will have paid more interest.

Regardless of what ever method you decide on, recognize that you are the one responsible for getting your monthly budget in order.

It is your budget after all that determines how much money you can put toward your debt in the first place.

BLUE COLLAR SCROOGE

Please to meet you, hope you guessed my name! It's Blue Collar scrooge here and I'd like to just thank for taking the time to our little blog to help accomplish all things financial. Personally financial that is.

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