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Wednesday, May 3, 2006
How Do You Prioritize Your Debt?
FiveCentNickel made some very good points in his post here. That is why I lean more to John Cummuta's teachings over Ramsey's. Don't get me wrong, they both have some great teachings, and both teach to become cash only. Thing is how do you Prioritize your debts. I like FiveCentNickel, believe the higher interest loans should be paid off first. It doesn't matter to me if its the biggest or smallest loan, as soon as it's paid off, the payment is then snowballed over to the next payment.
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The Dumping Debt lesson is coming...where you'll see that Dave makes no qualms about why he advises against "good math":
ReplyDelete“We are more concerned with modifying behavior than correct mathematics,” he writes. “Being a certified nerd, I always used to start with making the math work. I have learned that the math does need to work, but sometimes motivation is more important than math. This is one of those times.”
Which way is better? Whichever you can do and keep doing. If you are and continute to be Gazelle intense, you'll eventually be debt free no matter what you do.
Personally, I pay off debts smallest to largest. We've been inside our current debt for so long now, we really need a "win". Can't wait.