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Paying off your debts

Paying off your debts

We all know that having a plan in place dramatically increases the odds that we will be successful at whatever we are attempting to accomplish. Paying off our debts is no different! We are much more likely to pay off our debts if we devise a plan and make a concerted effort to carry out that plan.

The question is "what should the plan be?" There are two popular approaches to paying off one's debt - the Debt Snowball approach and the Highest Interest Rate approach. Each has its merits. The approach which works best for you depends upon your unique personality and financial situation.

Other actions to consider

Once you have paid off your consumer debt, begin applying the money you formerly paid servicing that debt as a principal payment on your mortgage each month. This will allow you to build equity and pay down your mortgage more quickly, saving you thousands in interest over the life of your mortgage.

Reach out to your creditors to negotiate the best possible interest rates and terms for your debt repayment.