Your next step to paying down debt - focus on one bill only

[homesteadmamma]

You've written down your debt, you've taken ownership of your debt, now it's time to start focusing on one debt only.

Decide which debt you want to pay off first. Many will tell you to pay off the smallest debt first and then snowball that amount on to your next debt. We did it the opposite because we had a loan that had 29% interest and was the highest payment.

It's your choice how you want to do it, however now is the time to FOCUS, FOCUS, FOCUS on that one debt ONLY. Make your minimum payment on that debt and add every penny you can scrounge up on that debt. Watch as the amount comes down - you'll be encouraged when you see the amount of interest coming down and the amount you owe coming down. It doesn't matter if it's only $4 more or only $20 more - add it.

Another little trick - if you make your payment at the beginning of each month or middle and then find you have extra $$ after you've made your payment, don't put that money aside until your next payment. As soon as you have it, make another payment of the amount of money you have. You'll save on interest and you won't find yourself using that money for something else, like bread or that good sale you've just seen. You might have to buy a few extra stamps if you make your payment via mail, however the more you put on your debt each month (even if at different times), the better. Remember our goal is to get our debt paid off.

Once that debt is paid off, you can then snowball on to the next debt. We will talk about that next.

[SHOPGIRL]

Yup. This is exactly what I'm doing. Whenever I earn extra money, I immediately take that money and pay on my one debt. So far its working great. I've been able to make several payments already in the last few days. I make my payments online so I'm not paying for stamps.

[missmollymayhem]

My goal #1 is Old Navy. I have them down to $61.... it will be paid off within a few weeks. THen is my #1 bank loan-my highest monthly payment. That will be paid off within a month with my tax return. SO, I'm opting to choose a third, since these goals will be reached rather quickly. Third is my #2 bank loan-my highest intrest rate.

I would strongly suggest that everyone see if thier bank offers free online banking. My bank, USBANK, does, and I send all of my payments for free. That saves me about $80ish a year in postage, and the payments are set to go automatically-no late fees!

[SammeyG]

I have been doing the same. Try to pay one off at a time. In the year 2005 I was able to pay off 2 of dh c.c. Eventhough that both had over $1,000( nearly $2000) I was able to get those two paid off. I am glad that I did. My next one that I am going to focuse on is our personal loan that we have. It is $3,034.25. I am going to take our tax return and apply it to that. Then it will be my husband last c.c that I will tackle. We have 3 apeice. This will be the last one that is over $4,000. I will post hw much the balance is when I get the statement. Good luck to everyone with there goals this year.

[Mojjo]

I've decided to dedicate my change jar to this. It's too important. And the sooner I get it paid the better I will sleep.

[Lylac]

Such great info, Homesteadmamma!

[thrifty gal]

This is exactly what we are doing. One debt at a time. We chose our smallest debt. We will be working on our Bankfirst cc. The balance is $242.

[mom2matty]

We do the same!! One of the best things about having our vehicle loan at a local credit union is I can go in on any given day and make a payment on the car.......I can specify that it go on the principal only. Some months are better than others but when we have even just a little extra, we do it!!

[Scattymum]

I'm concentrating on our smallest debt first, hopefully I can get it paid of fairly quickly so I can move on to the next one etc.

[JaneP]

I have my radar set on my DH CC with a balance of $4221.96. I just got the balance on line so I know that this includes all of the Christms charges.
I pay my bills on line and it makes it very easy to pay extra on any bill I choose.
I have 2 other cc but DHs is the one I'm focused on.

[freedeal]

[i] FOCUS, FOCUS, FOCUS on that one debt ONLY. [/B]

I believe this is going to be the key for me. Instead of trying to implement 50 things I am focusing on one debt. Now I may try different things to get it down but my focus is on the one debt.

[catzz64]

I am going to focus on the small ones...those are the most current and I should be able to pay most of them off in the next month or two...then I'll tackle the big ones; those are older and the interest rates aren't that high...I hate getting a huge stack of bills every month so I'd rather get rid of the little stuff first.

I also have a bunch of medical bills that I need to focus on...I will work on that next month I think

[mizniteowl]

I started with the debt that's been bugging me the most. It's not the highest interest debt but once it's gone I'll feel better. The next one is one that NEVER seems to get lower. It's been the same amount for months! Any extra amount dh makes over his regular pay goes on the current debt.

[kaykwilts]

Dave Ramsey calls it the debt snowball. You pay off the smallest first and then move on up. You apply any extra money you get (yard sales, extra jobs, etc.) to your debt snowball. Makes good sense to do it this way. You feel like you are going somewhere when you can get rid of even the smallest debt.

[catzz64]

Kay, I think I have his book...I guess now would be the time to read it huh? Actually, I have accumulated the best of them...Frugal Gazette, a bunch of Suze Orman (I even watch her show occasionally), Dave Ramsey, the Rich Dad, Poor Dad books, etc...not sure why they don't work (oh, I have to put them into action????)LOL