![]() ![]() Balance Owed – The remaining amount of your debt that you need to pay.You now have the tools and a plan to make it happen – start today! Debt Payoff Calculator Terms & Definitions Related: Why you need a wealth plan, not a financial plan.ĭebt freedom is an important contributing factor to building wealth. Dream what it will feel like to not have debt looming over you like a dark cloud. Imagine how much money you'll save on interest. Paying off your debt is a truly rewarding experience. Switch from asking how much you'll have to pay monthly, to how much you'll have to pay overall – a subtle but important shift in thinking. If you can't afford to pay the bill in full by the end of the month then don't buy it. Use your credit cards only for transaction convenience – never to extend your purchasing power. If you're going to carry credit cards, make sure you're spending within your budget. Surprise the salesman by whipping out your checkbook after you've negotiated your best deal! Dealerships make a large portion of their profits on finance charges. Once you've paid off your debt, it's time to live debt free forever!īuy cars outright – never take out auto loans. Related: How to be a pro at growing your wealth Debt-Free Living ![]() Make up your mind to buy necessities only, except for the occasional treat to reward yourself for paying off a loan. Stick to your debt plan and discipline yourself – Don’t acquire new debt.For more information on this process, check out the Debt Snowball Calculator. When the first debt is paid off, use the cash that is freed up to pay down the next debt on the list. Organize a payment – Focus on paying off one debt at a time.Just use the Debt Payoff calculator to know how much you need to allocate each month for paying off your debt. Your approach will largely depend on your financial situation – and when you want to reach your goal. There is no right or wrong approach for allocating money to pay off debts. Direct all your extra money to paying off the most important debt on your list. Figure out how much you can afford to pay every month – Review your budget to figure out how to free up some money for debt repayment.Pay the highest interest rate debt first to minimize your total interest cost. Some debts are more urgent than others because the consequences of not paying them are more serious. Rank your debts – Start by ranking each debt according to highest interest rate.Make a list of all your debts, the amount you owe on each, the monthly payment for each, and most importantly, the current interest rate on each loan. Calculate all your debt – Gather your latest statements.If you can't pay with what's in the bank, don't pay at all. ![]() Live within your means! Cut up credit cards, and avoid all loans.
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