Debt Payoff Plan
Debt Payoff Plan
Paying off debt is always a priority in our marriage, so we have a plan in place to help us achieve this goal! First, we write out what debts we have and the total amounts due so that we both know where we’re at. Then, every month we chip away at our debts. We work on the debts with higher interest rates first and if we get a bonus or extra income from another source, we use a percentage of it to pay down debts. We also do our best not to add any new debt. While it isn’t always feasible, we try to only spend what we can afford to avoid future debt altogether!
This picture is from a vacation that my husband and I went on – paid fully in cash! We leave the credit card at home on vacation to avoid overspending. While vacations are fun, you don’t want to go into debt for one!
MilSpouse Money
Mission Response:
What a beautiful vacation photo of you and your husband! Vacations are wonderful and they’re even better when debt doesn’t follow you home. Great job saving for your trip ahead of time! You can fully enjoy the memories from your vacation without having to deal with the added cost and stress of how to pay for it.
If your family is struggling with debt, know that you can change course. Check out our Manage Debt resource for a six-step process to get your family on solid financial ground:
- Stop adding to your debt.
- Build an emergency fund; start with $1,000 then save three to six months’ worth of living expenses.
- Confront your debt and know what you owe, how you got into debt, and how to minimize your costs.
- Know your cash inflows and outflows; use our Create a Budget resource and spending plan worksheet to get started.
- Adjust your cash flow by spending less or earning more.
- Pay down your debt using the Snowball or Avalanche debt pay-off methods.
Amy is using the Avalanche method to pay off their highest interest rate debt first. Choose the method that you can stick with and works best for your situation. You can do this!
