If you could be debt free today would you pursue it? Why for heaven’s sake do people seem content to stay burdened for so long, sending only the minimum for years to lenders. I don’t know about you but I want my future income to be all mines and not some banks. Do you know the banks are smiling every time you send the minimum in month after month? That means they have you beholden to them for that much longer. Hence you are their bank roll and source of future revenue. Keep reading so that I can explain further how we all can use the pay debt now method to change our lives.
Enough is enough and I want you all to do well financially. It’s time for a change with how we view credit and debt. If you can’t afford expensive items, think very hard if you will appreciate it after 5 years paying for that product, Time is good at making most of us seem like our choices didn’t make sense back in the past. Now that you understand the thought process, how can you solve debt issues today?
The Pay Debt Now Repayment Method:
There’s a big debate about what’s the best debt repayment method. The snowball or the stacking methods are leading the pack in getting people debt free motivated, and these are fine in helping most people with debt issues. But I have a better option and it is the Pay Debt Now (PDN) method, basically you want to send as much money as you can on the smallest balance as frequently as possible. When the money is present send any amount you can immediately, do not wait till the due date, because I’ve notice idle money gets wasted. (This system works best with online bill pay) The point is to be debt free right, so if you made an extra 50 dollars in overtime this week, send it now, as it will give you tremendous traction toward becoming debt free. Every little bit counts and the more you send the more you save on interest and time.
The best way to describe it is you will accomplish two things. You get the emotional wins with paying off the smallest balance like the snow ball method, and you get the opportunity to pay off a greater amount than planned, and lastly you pay down more in interest than normal like the stacking method. The reason you pay down more in interest is when you send infrequent payments, once that payment is received by the lender, the principle amount owed is reduced and you pay less interest going forward.
When I implemented the PDN method during my credit card debt payoff timeframe I was able to pay off huge monthly amounts towards my debt. One month it would be $600 dollars, the next it would be $1,000. It all depended on how focused I was and how much extra money I made during the month. Now that I do not owe one dollar to credit card companies I am fully relieved.
If you can afford to send only 500 dollars a month to a lender, it’s better to send $250 on the 1st day of the month, and then send the other 250 on the 15th. In comparison it’s far worse on you financially to wait to send the whole $500 towards the end of the month before the due date, because interest accumulated while you waited. Don’t Wait be impatient with debt and smash it like a hulk. Once your debt free you can yell in the middle of Times Square, I’m Debt Free!
What do you feel is the best Pay Debt Now Method?
Let’s Recap the different methods:
Stacking Method – paying off the higher interest debt first while paying the minimum on the rest.
Snowball Method – Paying the most you can on the smallest balance, while paying the minimum on the rest regardless of interest.
Pay Debt Now Method -send as much money as you can, when you get it, on the smallest loan balance amount, while sending the minimum on the rest, break down the payments and send them immediately to avoid letting the interest accumulate.
Rich Uncle EL
Sounds like a good approach – rather than letting money idle in a bank account and fall into idle hands. Online payment is perfect for this. I know on our car loan I would send $25 dollars here and $25 dollars there and though it didn't seem like much at the moment it really did add up. Loan is gone!
Yes I got rid of my last car loan in 18 months doing just that and using the PDN method.
Thank you so much for the encouragement. You're right about people who feel real comfortable with living with debt. I hate debt so much that I broke up with him the beginning of this year and have been working real hard since to break ties. Your post is pure motivation. Thanks.
Hey no worries, that’s why we blog about these issues around better money management. I hope one day we all can be debt free. Thanks for the comment.
Great plan! It's a modified snowball method– modified with habit. The more you get in the habit of being on top of your money the better. Even if you CAN'T send anything that week you will still be in the habit of checking and it will help your budget by keeping spending in debt and eliminating Stick-Head-In-A-Hole Syndrome. Goodbye debt!
I know I do better with my financial choices when I check in often and I'm past the debt stage and well into the saving stage. See, it's a habit that grows bigger and 'helpfuller' than the original reason! Yeah!
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Yes it is and it solves the debate between the two other popular debt paying methods, as the point is to eliminate debt as soon as possible. It alleviates trying to be a math genius in the debt paying process by getting people to act fast without contemplating the interest or the balance.
Yes…this is Hulk debt obligation. We utilized the snowball to pay off $120k, however what ever technique keeps you inspired to get the obligation gone works for me. Thank you so much for the write-ups!
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Hulk obligation commitment!! But, We used the snowball to pay off $135k. Procedure keeps you enlivened to get the commitment gone works for me. Thanks!!!
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We can start getting rid of loans by making a list of all of your debts, prioritizing them by interest rate, amount and level of emotional attachment. This will set us a good financial plan of paying our debts in time, so we wont suffer bankruptcy.