How To Pay Off $40,000 Of Debt In 48 Months Without Sucking The Fun Out Of Life

Dear Debt,

You are the worst. You keep me up at night, you make me feel like shit about myself, and I can’t help feeling like you’re never going to go away. I hate you.


99% of millennials

We have been conditioned to believe that debt is just part of life, and for many of us, it is. But that doesn’t need to be the case. As humans, we have an innate ability to chase the things we really want. However, a halfhearted effort will get us nowhere fast – and it often does just that. The first step towards any major accomplishment is acknowledging the feat at hand (no pun intended), and making a commitment to yourself that you will overcome the challenge – “I’m done feeling like shit about this debt and it’s time to do something about it”. If you’re ready to be debt free, this is how you do it.

Here’s how it works – Let’s say this is your total debt picture:

Screen Shot 2017-06-22 at 11.09.24 AM

First, forget what you think you know about high interest rates, the opportunity cost of money, and all the other crap you halfway payed attention to in Economics 101. Bottom line – if you are in debt, you need to get out. Organize your debts from smallest to largest balances, disregarding interest rates, and lets get work.

This is called the debt snowball, and it works – fast.

Start with your smallest debt and begin building the metaphorical snowball. If you pay the minimums on everything, but put $200 towards the Amex instead of the $35 minimum, you’ll pay it off in four months. Then you can get to work on the Visa by paying $250 per month ($200 from the paid off Amex, plus the $50 payment you’re already making). The Visa card will be paid off in about 4 months – nice. Now you have $500 per month ($250 from the credit card payments, plus the $250 you’ve been paying on the car loan) to put towards paying off your car. If you follow this path, your car will be paid off in 17 months! If you just paid the minimums, you’d be paying that car off for 41 months!

By the time you’ve made it to your student loan, you’ll be able to throw $790 towards that balance every month ($290 that you’ve been paying towards the student loans, plus the $500 you’ve been paying towards the car & credit cards). I know that seems like a ton of money, but you’ll be so used to paying down your other debts that you won’t even realize it! In fact, I bet by this point you will have become so obsessed with paying down your debts that you’ve likely found ways to free up additional dollars to put towards these payments! After 23 short months of $790 payments, your student loans are gone – cya.

Once the dust has settled, you can give yourself a hug because you just paid off $38,058 in 48 months. Congratulations, you are now debt free and have $790 ($200 Amex payment, plus $50 Visa payment, plus $250 Car payment, plus $290 student loan payment) to spend, save, or invest every month.

Dear Debt,

Hope you had a nice stay- see ya never!


99% of millennials

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