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Pay off all unsecured debt first starting with the higher interest rates. However, if you are close to paying a loan off completely, then yes, do that so you can have the cash flow applied to other loans, just like you said. Start focusing on making income rather than how much debt or you will attract more debt. Check out "The Secret" dvd and you will understand what I mean. Good Luck.
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The concensus seems to be the same. Pay off the higher interest debt first, and then work your way down. Increasing your income will increase the amount of money you can pay down in principal, which will help you pay it off faster.
Sell some stuff on Ebay, or get a part-time job delivering pizzas or something until you get the debt paid off. Whatever you do, you know it's only temporary so who cares what it is. Spring/summer is a good time for outdoor jobs and contracting jobs, if you have the skills. Finally, do not reinvest interest or dividends from any investments that you have. Instead, have it paid out to you and use that to pay down your debt. Since you are paying taxes on it either way, my as well have it work the hardest for you. |
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June is here, and here's where we stand:
UPDATE DEBT DECREASE 8700 car loan 7.99 rate 2644.38 Unsecured loan 8.9 rate 17300.06 Wife's student loans 10045 My student loans so... $38,689.44 in debt. The good news is that we've been disciplined enough to not use the credit cards at all, so if we needed to for extreme emergencies we could rack up another $10,000 or so in credit card debt. We won't need to though because our emergency fund is almost high enough that we can convert it to a money market account (right now it's just a savings account) and then that money can be working for us in a liquid state, where we can draw from it if we need to, but earn 3.5-5% interest on it if we don't. Also, we have a CD coming to maturity in September which we will dump on top of that unsecured loan, which will help us have it completely paid off by then. This will free up another $330 towards the car every month. |
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