If you have debt, some of the mandates are clear to you:
- Pay it off, obviously.
- Pay down a single debt at a time. Pay either the highest interest rate debt first (which makes sense on paper) or the lowest-sized debt first (which works) or some combination.
- Pay as much as you can, to get rid of the debt as fast as possible.
It’s that last directive that I want to talk about today.
If you’ll notice, that’s the most nebulous of them all. “As much as you can” doesn’t really give you a roadmap. How much “can” you afford to put down on a debt?
Obviously, I could hide behind saying “everyone’s situation is different”. But I want to try and inject a little more to the discussion.
Because this is also a “more” situation, talking about you one should be doing “more”, without identifying what that “more” is.
And if you’re wanting “more”, you’ll never achieve it. As there will always be more.
I want you to feel satisfaction in your plan. I want you to achieve maximum impact.
So if you’re paying down a debt, what real difference would paying more do? Is there a sweet spot?
Let’s find out.[Read more…] about How to find the sweet spot for paying extra on a debt