Paying off Debt - Go on Offense

Paying off debt quickly and efficiently...that's the plan.

Once you know the total of your debts and the minimum payments required, use a debt roll up or snowball plan (the name depends on where you are live in the USA) to pay off your existing debts by using your money as efficiently as possible.

A debt roll up plan is a simple, efficient way to repay debt. All you need the desire and discipline to start debt free living.

The basic concept has two important parts. Focusing your payments on one account at a time and not reducing your payments if the minimum payment on your account is lowered by the creditor.

To really accelerate the power of this plan, you will need to make more than your minimum payments.


It may be easier to visualize the of the power of this plan by opening this example.


Following the debt free living "just more" rule, $25 is added to the total minimum payments found in our example debt repayment schedule.

Our goal is getting out of debt and seeing results as quickly as possible; so the plan is to pay off the smallest debts to the largest until all the debt is repaid.

Basically, the plan is to pay the total amount you have allocated (total of minimum and anything else you can budget toward debt repayment) towards paying off the balance on the first debt on your schedule.

Once it paid it off instead of putting that minimum into your pocket you add that payment to the payment amount of the next loan on your list.

When the second loan is paid off, take the amount were paying toward the first account and the amount from the second loan you just paid off and add it to the third loan on your list.

From there you just keep rolling the payments to the next higher loan. It's like a snowball going downhill. The payments you are making to accounts lower on your list keep getting bigger as you go.

If this was your schedule and you followed the plan, you would have saved $3,051.04 in interest payments and paid off all the debt in 56 months rather than the scheduled 111 months. That's just about cutting the time in debt by half.

A complete review of the payment results using DebtAnalyzer™ software is here for your review. This software can be used to see the effects of several different ways of paying off debt. (Other software products are available on the market, but I have used this one for many years.)

Sounds simple … save money and cut debt repayment time down dramatically, what's the catch?

Like all winning strategies, it takes discipline and following the rules.


Paying Off Debt Practice and Exercise:

  1. Concentrate your payments on one loan at time.
  2. Keep making the minimums as planned on all other debt.
  3. Celebrate getting out of debt as each loan is paid off.

Go from paying off debt to back to make a budget.

Back to Family Budgeting