Do you know the difference between BAD debt, GOOD debt... and UGLY debt?
- Good Debt is debt that will eventually earn you money, such as investment debt.
- Bad Debt keeps you in a cycle of owing money, such as your own home loan.
- Ugly Debt actually prevents you from getting anywhere with your financial future, such as credit card debt, personal loans and car loans
How much UGLY debt do you have in your life right now? And how much are you paying in interest every month on that UGLY debt? What could you be spending or investing that money in every month instead of GIVING it away to the banks?
It's time to tackle that Ugly Debt, and set you on a plan to get rid of it for good!
Have you heard of a DEBT SNOWBALL before?
A debt snowball is a proven strategy to help you stay motivated whilst paying down your debts.
Step one of the Debt Snowball - CUT UP YOUR CREDIT CARDS. Seriously. It's time to perform your own plastic surgery, and stop using those financial vampires once and for all.
Then, you need to list your UGLY debts from the smallest amount to the largest amount. If you have two debts that are a similar amount, list the debt with the highest interest rate first.
You're going to put ALL of your extra cashflow into the first debt that you've listed, and only make the very minimum repayments on your remaining debts. You want to be entirely focused on just that one debt, and get as much money as possible going into it so you can rapidly speed up paying it off.
Paying off a debt is so SATISFYING... and as you pay one off, you'll be more motivated to pay off the next... and that's what the Debt Snowball is all about - building and keeping that momentum so you can reach your goal of being debt free.
Once you've paid off a debt, make sure you close that account... what's the point in paying it off if you're just going to be tempted to use it again in the future.
You're then going to focus all of your additional cashflow onto the next UGLY debt on your list. You'll have more money to put towards this one now, so your debt reduction will be even faster!
The debt snowball allows you to have a LASER FOCUS when paying off your debt. It breaks down the larger goal of paying off debt into achievable chunks, and the process gets easier and faster the further down the list you go... just like a snowball.
So what are you waiting for.... get started on your debt snowball right now!
