Debt is a horrible master. Nothing saps wealth like being in debt. Just take your monthly payments, add them together, then times it by twelve.
How much do you spend on debt?
Once you get the number go to this compound interest calculator. Set as the interest rate a reasonable rate (try 6%). Then set the years to the average length of a car loan (5 years), then take your monthly amount you spend on debt and add it to the calculator. Select the compound interval to yearly. What is the number you get? Image what you could buy or save if you paid off debt!
How do you pay off debt? Follow these simple steps:
- Get the current balances for your debt accounts.
- Throw the amounts and list in excel or Google spreadsheets.
- Sort the list from smallest to greatest.
- Add due dates, minimum monthly payments
- Pay off the smallest amount ASAP
- Keep doing this until you reach your mortgage.
- At this point I would apply half of what you were spending on consumer debt to pay off your mortgage faster!