Day 32 of 33 Days And 33 Ways To Save Money And Reduce Debt: Decide Which Debt To Attack First

Click here to read all of the 33 Days And 33 Ways To Save Money And Reduce Debt posts.

Day 32: Decide Which Debt To Attack First

For the purpose of this post, when you read attack, think ‘send extra payment to‘.

After making minimum monthly payments to all of your creditors, it’s time to pick a specific debt to attack first.

If you want to pay the lowest amount of total interest – attack the debt with the highest interest rate.

If you want to receive an emotional boost and see en entire debt paid off – attack the debt with the lowest current balance.

If you want to feel good about being out of a specific type of debt (regardless of balance or rate) – attack the debt that ‘bothers you the most‘. (Think personal loan, payday loan, credit card debit, IRS debt, etc.)

You can send one extra payment every month – or you can make multiple extra payments every month. Either way, pick a debt and attack it!

I look forward to reading your comments -Click here to read all of the 33 Days And 33 Ways To Save Money And Reduce Debt posts.

Observant readers will note that this series has taken much longer than 33 days. I can assure you, I am blogging as often as life permits.

This entry was posted in 33 Days. Bookmark the permalink.

8 Responses to Day 32 of 33 Days And 33 Ways To Save Money And Reduce Debt: Decide Which Debt To Attack First

  1. J. says:

    What is the advice for the single mom (teacher) with three kids who has worked two jobs for ten years and still has a mountain of debt because her ex is a deadbeat?

  2. NCN says:

    J.
    Are you using a written budget? Have you stopped using credit cards? Are your kids ‘on board’ with saving money? NCN

  3. Stngy1 says:

    I’ve asked this elsewhere, but will pose here: Do you [anyone?] consider money set aside for irregular expenses as fixed in stone as, say, rent, which should be taken care of BEFORE snowballing? Can’t decide myself!

  4. NCN says:

    Sting1…
    I’m not sure what you are asking..

  5. Stngy1 says:

    To clarify:
    There are always predictable, but irregular expenses which lots of folks budget/save up money for every month. An obvious example would be saving up for property taxes if you own a house. Less obvious is setting aside a budgeted amount for, say, future car maintainance. The question becomes do you pump up this aspect of your savings first or snowball debt.
    One example: suppose you serendipitously get a $100 check. Does it go towards building up my car maintainance fund, or does it get snowflaked to debt? (Of course, Murphy guarantees that if I haven’t funded my car maintainance account, the car will break.)
    There are other even more predictable expenses such as insurance, gifting, etc. which I could not pay up front without having saved for. Do I fund (save up for) all these anticipated expenses before using any $ for snowballing?
    Hopfully this makes sense…..

  6. NCN says:

    Stngy1…
    When I was getting out of debt, I simply maintained a $1000 emergency fund – and I budgeted (by dividing by 12) for annual expenses. As for future unplanned for expenses – like car maintenance, I simply included that in my budget. That being said, I didn’t overdue it. In other words, I erred on the side of debt reduction (and hoped that maintenance needs would be minimal. Beyond the most basic budget items, I put every extra dollar towards debt reduction, but I was very, very intense and focused.

    So, to recap…

    In the budget – gas, oil change, tire rotations…
    Emergecny fund – new tire, insurance deductible

    I think that it is important to think about the details, but I don’t think it’s possible to fine-tune our budgets enough to cover ‘every eventuality’. Budget for gas and oil, have a decent emergency fund, and then snowball away!

  7. Stngy1 says:

    THANKS!!!

  8. Pingback: We’re Interest Order - How About You? | I've Paid For This Twice Already...