Why Pay Off Your Higher Interest Rate Debt First


Pay Off Highest Interest debt First

Pay Off Highest Interest debt First

Paying off your higher interest rate debts is essential to getting out of debt and leading a stress free financial life.  The higher interest rate is making your regular scheduled monthly payment much higher than is necessary.  An item that you bought for $100.00 will cost you an extra $24.00 if the interest rate is set at 24%.  That extra $24.00 doesn’t sound like much but think of the other expenses in your budget that you could take that and apply it to it.


On the other hand, the lower interest rate of 10% will only cost you an extra $10.00 on the $100.00 item or service.  If you didn’t have the higher interest rate as mentioned earlier, you could buy an item or service worth $200.00 and still not be paying the interest of 24%!  This is why you must make the higher interest rate disappear off of your budget quickly.

It is what as known as the silent killer of budgets.  You won’t realize the money is disappearing until it’s too late and your budget is belly-up.  Try to stay away from high interest loans and lines of credit.

The best way to track all of this is to keep your budget accurate and up-to-date.  If you are keeping your budget in a notebook or in your head, stop it now before it’s too late.  You need to have a solid and user friendly budget tracking program such as Easy Budgeter to keep all of your expenses and income in.  You will be able to open up the program at any time and see exactly where your finances are.

By knowing exactly where everything is, you can start making small changes in your spending to pay off those high interest loans and start having extra money.


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