So You Want To Get Out Of Debt?

Several years ago I took an enrichment class at our local community college with a friend of mine.  We really want to come up with some strategies to eliminate some debt and make a huge impact in a relatively decent amount of time.  We had both spent years picking our largest debt and trying to make a dent in it.  We were minimally successful and getting quite frustrated about it.

Our eyes were definitely opened during this class.  We learned quite a few strategies but the most important was how to pay down our recurring debt.  To this day I still carry debt but attack it in this manner.

There are essentially four structured ways to pay down recurring debt:

  1.  Pay down the largest outstanding balance first
  2. Pay down the largest interest rate first
  3. Pay down the smallest outstanding balance first
  4. Pay down your smallest monthly payment first

In the past we had always paid down our largest outstanding balance first – but this course taught us to pay down the smallest outstanding balance first and that made all the difference.

Here is the plan

Determine your lowest outstanding balance.  Let’s say it has a monthly payment of $25.  Add $15 per month (pay a total of $40 per month until it is paid off.

Once that is paid off, determine the new lowest outstanding balance.  Let’s say it has a monthly payment of $45.  Pay the $45 PLUS the $40 per month you had been paying on the one you just paid off for a total monthly payment of $85!

Once the second lowest debt is paid off, determine the new lowest outstanding balance.  Let’s say that one has a monthly payment of $60.  You will attack that one by paying the $60 plus the $45 plus the $40 for a total monthly payment of $145!  A monthly payment that size will knock that debt out pretty quickly.


It is quite amazing to see the debt drop off.  I have done this very successful on a couple occasions – yup, sometimes it does get away from me again.  At the moment we have four horses which is about three more than I probably should have.  Now that they are all settled in it is time to start implementing this strategy again asap.

Bonus Tip

The holidays are coming – have you heard of the four gift rule?  My kids have seriously led a spoiled life.  This year however the horses have been the priority.  In order to keep the horses, it means some changes in our lives.  One of them is that we are implementing the four gift rule (with a little flexibility).

What is the four gift rule:

  1. One gift they want
  2. One gift they need
  3. One gift to wear
  4. One gift to read

I really thought that would be upsetting for them but seriously it gives them a place to focus their wish list and the entire process is more organized and less last minute panic shopping.  I will not use credit cards for holiday shopping – I didn’t the last three years and I won’t this year.  I spent years paying for a full year or two for holiday gift giving.  How ridiculous is that?  But it happens to people all the time.

Where To Get Assistance

If all this seems too overwhelming for you – have no fear there is help available at Nationwide Debt Reduction Services and they even have an amazing stewardship program called the Nationwide Debt Reduction Services Scholarship program designed to help those that want to pursue higher education.

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