plonkee money an english-er's thoughts on personal finance

March 27, 2007

five steps: step 2 pay off consumer debt

Filed under: Uncategorized — plonkee @ 11:26 am

This is the third in an irregular series on the five steps to solid wealth. Step 1 was spending less than you earn. Step 2, paying off consumer debt is generally (but not always) necessary to ensure solid wealth because consumer debt is expensive. It certainly puts you in the right mindset of not paying more (in finance charges) for something than you have to.

Consumer debt can be crippling. Interest rates are often high. You are paying through the nose for the privilege of buying what you can’t afford. It starts with stopping the use of credit. Pay it off by finding as much money as you can and throwing it at the debts. My favourite method is the Dave Ramsey debt snowball. I haven’t used it myself, but it comes with good references, and I can see why people stick to this method more than others. And that’s what’s important folks, sticking to it.

You can find great resources within the personal finance community on getting out of debt. In particular, no credit needed is the quintessential get out of debt blog and the archives on his site are immense. Get inspired and pay off your consumer debt.

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