[Dave-ROR]

Originally Posted by pyroguy

Mostly sound financial advice. I agree with the three points, but I will argue that #2 is a little skewed. While paying off the largest interest makes the most mathematical sense, many people get burned out quickly if their largest interest load is also their largest balance loan. By listing the debts smallest to largest, regardless of interest, paying the minimum on everything but the smallest and attacking that one with a vengeance you get to get some "quick wins" which give people a sense of accomplishment. When you see you're making progress you're more likely to stick with it. If you do a budget (which I would add as a 4th item on your list) and squeeze everything out of it that you can to put on paying down the debt the math works out to maybe a month or two extra between the way I suggested vs your way. The difference is people are more likely to stick to a plan if they see progress.

Overall good advice and it's neat to hear your take. I agree with a vast majority of what you said. Emergency fund, mandatory. Pay off debt, absolutely (no debt is good debt IMO). Invest for the long term, one day you'll want to quit working. I know I do. Thanks for the share.

I agree - to a point. To me it depends on the balances.. ie if they are all ~equal then you always target highest interest. If on the other hand 4 are say 3-5k and one is 1k, get rid of the 1k balance just to get that victory.

I also tell friends working on paying off debts to set shorter term goals and have a little celebration at those goals. Doesn't have to be expensive, but one buddy was ~35k in CC debt and he set goals where he would do a track day at 22k, or buy something at 15k that he wants, etc. Was a good motivator and he ended up eliminating all of that debt much quicker since he had some goals to shoot for.

Now.. will power is a requirement for making that happen of course... and one could easily argue that will power has already failed to get $35k in CC debt. But for some people (including myself when I was ~18k in CC debt many many many years ago) it definitely can help you stay on target. I actually found myself passing my "celebration target" just to prove to myself that I could before buying whatever it was I wanted - and that purchase would have to be cash also not additional CC debt.