Most women pay their bills the traditional way by paying the minimum payment on their bills each month. Did you know that paying your bills this way can end up costing you double over the term of a loan? Just like compounding interest in a savings account that continues to pay you interest on the interest you earn, there is a flip side to that when it comes to debt.
When you start paying more on your debt each month, putting a larger amount of the payment towards the principal on the loan, you start to pay off this debt faster. Generally this is done by paying the minimum on all of your payments except your smallest debt. Once that debt is paid off, you add that payment to your next lowest payment and so on, until your debt is paid off. This is one of the single most important things you can learn about debt. If you begin to pay it off quicker, by not changing anything other than how you apply your payments, you are able to get out of debt and live a debt free life. You don’t need to have a huge increase in income, you just need to start thinking about how you apply your debt in a different way.
Calculating debt payoffs can be tricky. That’s where the Wealth Accelerator program steps in. It allows you to calculate your debt payoff schedule, see how much money you need to set aside to retire by your dream date and it shows you how much your debt costs you daily by not applying this program!
For example, a person carrying an average of $290,000 in debt would end up paying more than $200,000 in additional interest on that debt for a total of $590,000! By not implementing the Wealth Accelerator plan, this person’s debt is costing them $230 a day! These are scary numbers! So how can you avoid being in this situation?
- Take an honest look at your current financial situation. If you are not happy, commit to changing things.
- Set realistic but challenging goals for your future.
- Begin establishing your short and long-term budget needs and wants.
Getting out of debt is possible if you have the right tools to create your plan. Even if you don’t have as much debt as mentioned in the example, your debt is still costing you! Make the choice today to get out of debt and start building wealth for your financial future.
Jenny Kerr is an expert author, consultant, blogger and social media professional. She loves living a flexible lifestyle and spends most of her time reading, gardening and trying new recipes she has cooked from scratch. Jenny is passionate about helping people save money and blogs about it on her Jenny Pincher site. She has taught her self-developed “Basics of Budgeting” course throughout the St. Louis area. Visit her site at