When I graduated college back in 2010, degrees in hand, I had stars in my eyes and spunk in my spirit. I was young and carefree, the world was my oyster and I was excited about the future. There was just one problem. Between student loans, credit card debt, and an auto loan, I had accrued about $55,000 of debt. I also had no job prospects, at least none that justified my newly earned music and psychology degrees and/or would be much help with attacking Debt Mountain. I was also an impulsive spender. The fact that I wasn't making a lot of money combined with the fact that I had a lot of debt and a bad habit - let's just say my starry-eyed excitement was fading fast, and I knew I needed to act. It's amazing, the things we can accomplish when we have to. I prayed, researched and brainstormed every possible thing I could do to become debt free. Doing all of that took me on a life-changing journey; so much so that I feel compelled, obligated even, to share my story. I am so excited to relive my amazing journey as I share it with you in the posts to follow!
If you have read any of my previous posts, you already know that I am a huge fan of Dave Ramsey, whose teachings helped me eradicate my debt. Fast. A common misconception about paying off debt is that you have to attack the largest balance and/or interest rate first, but depending on the balance, that could take quite a while, especially if you are making payments on several other debts as well. What you want to do instead is attack the smallest balance first by applying every extra dollar that you can squeeze from your budget while making only the minimum payments on all of your other debts. Because it is a smaller balance and you are attacking it aggressively, it will get paid off much faster than a larger balance would. Then you can attack the next smallest balance. Everything that was applied to the previous balance can now be applied to the next one as well as every extra dollar that you can squeeze from your budget. Repeat this cycle until your debt disappears! Mr. Ramsey...
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