Show 28 - Getting out of Debt
In this episode, I talk about the simple (but NOT easy) two step process for getting out of debt.
1/31/20241 min read
Getting out of debt is a simple (but NOT easy) two-step process. First, stop getting into more debt, and second, choose a method for getting out of debt and stick with it! It is really that simple. As long as you stop getting into more debt you will get out of debt eventually. Even being that simple, we can break it down even more. Here are some key takeaways from the episode.
Key Ideas
he things that get us into debt in the first place are often emergencies. Building a small emergency fund is actually the first step to getting out of debt.
The difference between someone who succeeds in paying off their debt and someone who doesn’t is their mindset.
There are three debt payoff methods. 1. The debt snowball (paying them down by starting with the lowest balance). 2. The debt avalanche (paying them down by starting with the highest interest rate). 3. The debt lasso (transferring debt into a low-interest rate account to reduce your total payments--best mixed with the other two methods).
The important thing is to choose the method that will work best for you. As long as you stick with it you will get out of debt.