Debt

Getting out of debt is hard work. Financial consultant and businessmen Dave Ramsey is well known for helping folks get out of debt. I have copied his info graphic to explain how to “Snowball” your debt to pay it off quicker.

Here is an example of some actual numbers in a spreadsheet to show the method of snowballing your debt. You can figure out your own version of this using Dave Ramsey’s free debt snowball calculator.

Getting out of debt is one thing, but staying out of debt is another. Having insurance is important as it can help protect and preserve income and money when accident and tragedy strike. That’s why there is a whole section of this website just on insurance.

Avoiding or eliminating consumer debt is also something to be considered. Save up and pay for items instead of signing up for “payment plans.” Avoid the use of credit cards unless you can pay it off immediately. Reconsider what are “needs,” vs, “wants.” Also consider when you are most likely to be tempted to spend big. The following exercise from the Self-Reliance Personal Finance manual may be helpful:

Lastly, know what you can afford. This spans everything from the monthly budget to buying a house or getting an education. Don’t go into unnecessary debt just for convenience or out of ignorance. A financial planner can help you understand what you can afford. Dave Ramsey has a free online search engine to find trusted pros. If you are in the Seattle area, I personally use Pacific Capital Resource Group.