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Getting yourself out of a mound of debt can seem like it’s not possible for you to make happen. All types of emotions may arise when you start thinking about the debt that you have on your plate. You may feel overwhelmed and frustrated.  You may be terrified at just the thought of having to pay back all of that money.  I know I used to feel all these things and more. That’s why I was operating in denial.  I wouldn’t open up my bills or answer random phone numbers all because I was afraid to face reality that I owed so much money in student loans.

However, things started to change once I took control and now I’m no longer afraid!  I embrace the fact that I have these debts.  This developed out of having a plan in place.  One day I took the time out to review all of the debts that I had along with the interest rates and came up with a debt repayment plan.  I’ve been doing so well that my accounts keep saying that I owe $0.00 because I’ve been overpaying on them so much!  And no I didn’t start making more money.  I became wiser with the little money that I did have.  No matter how small your income is, you can start working on paying off your debts aggressively!  You just have to want to make it happen. You have to be at your breaking point and fed up with having debts hanging over your head.  You have to want to be financially free.  So how can you make it happen you ask?  I wanna discuss two debt repayment methods that you can use to start tackling those debts and banishing them out of your life once and for all!  Both of these methods require you to make the minimum payments on your accounts while you’re working hard to attack one of those accounts at a time.  The difference between the two comes in when deciding which accounts to prioritize paying down first.

Debt Snowball Method

The debt snowball method requires you to pay off your smaller balances first so that you can see progress quickly, which will motivate you to keep going.  What you will need to do is list all of your debts in order from smallest balance to largest (regardless of the interest rate) and include the minimum payment amount on your list.  You’ll continue to pay the minimum balance on all of your debts to ensure that you are staying current, but you’re gonna attack the smallest balance with force. Make sure that any extra money you get goes towards paying off that first debt.  Then once you pay off that smallest debt, use the money that you were putting on it to add to the next debt (the minimum balance + the amount from the first debt). You will be able to do this due to you ‘freeing up’ that money by paying that bill off.  This process allows you to build momentum and see victories sooner.  This will motivate you to keep working towards being debt free!  You continue this repayment plan until you reach a balance of $0 owed to anyone.  One con of this method is that you may pay more interest over time.


Debt Avalanche Method

With the debt avalanche method, you list out all of your debts from highest interest rate to the lowest.  This method requires you to attack those debts with higher interest rates, which ultimately allows you to pay off your debt faster and pay less interest in the end.  This method saves you money!  You will continue to pay the minimum balance every month except for the one at the top of the list with the highest interest rate.  This is the one that you are gonna wanna put all of your extra funds into so that you can get it paid off as quickly as possible.  Once you pay off a debt, remove it from your list and make sure that the new order is still accurate based off highest to lowest interest rates.  Continue this until you reach a balance of $0 owed to anyone.  One con of this method is that if your balance is large on your high interest accounts, it may feel like it is taking a long time to pay off these debts.  Don’t get discouraged!

So do this: think about all of the debts that you currently owe and devise a strategic repayment plan.  Allow yourself to make mistakes throughout the journey and learn from them.  Celebrate those smaller victories.  Do something nice for yourself when you knock a debt off of your list.  Stay committed.  Be determined.  Don’t give up!

Now let’s talk about it. Do you currently have a debt repayment plan that you follow? Which one of these debt repayment methods do you think would work best for you?  Sound off in the comments, I wanna hear from you!

P.S. If you thought that this was insanely awesome or made you think about someone that you know, please share this with them!


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