DebtREDUCTION| intro

1| You have debt
2| You want to reduce/eliminate your debt
3| You have a Zero Balance Budget
4| You have an Accountability Partner
5| You understand Snowballing Debt Payments

First Things First, there are multiple strategies to reduce or eliminate your debt. I use three, but there are more floating around. Your primary goal is to pick the strategy that will give you the best chance of success. Your success has little to do with mathematics, but much to do with psychology. Debt pay down can be a battle, so you need to attack it with the approach that is best suited for you.

Highest Rate Strategy| Focus your excess on the loans with the highest interest rates.
Smallest Balance Strategy| Focus you excess on the loans with the smallest balance.
More Principal Strategy| Pay more Principal than Interest with every payment.

We use the first two strategies when helping people who have gotten in over the heads with Credit Cards, Auto loans, Recreation vehicles and other consumer debt. The third strategy is used more as a personal preference for people with excess income and longer-term loans. Depending on your circumstance, you may use multiple strategies in your process. It’s ok if you get into it and realize you need to modify your approach. The secret is to pick a strategy and start. Set your goals, stay focused, stay the course and make sure to celebrate your accomplishments.

Brandon Haines, MBA, CFP®

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