Anyway, along with the series came a software CD that helps you easily see how to accelerate your debt retirement and just how long it will take to call the Dave Ramsey show and yell; "I am DEBT-FREE!!!"
I found the software very invaluable. It is absolutely wonderful. Even though Cummuta teaches paying off the highest interest rate first, the software lets you prioritize the debts the way you wish. The prioritization methods allowed are as follows:
ad a similar program, because it an excellent tool, if you are serious about becoming Debt-Free. The user though, still has to stick to their budget and "live like no one else, so that you can live like no one else."As taught in the Basic Course Fully Optimized Smallest Balance First Smallest Payment First User Ordered (Manual) Hyper Eliminated [TM] - Fastest
(quote attributed to Dave Ramsey.)
Sounds like a fun toy.
ReplyDeleteI'm paying off debt smallest balance to largest. It really doesn't matter to me which interest rate is higher, or which would be more "financially savvy"...
The fact that I'm leading a class to get people out of debt means that I would be a hyppocrite if I didn't "practice what I preach".
Not that I just blindly follow someone whatever they tell me. I follow because I've done the research and agree that there's more to personal finance than math.
Pyro -
ReplyDeleteit is a very fun toy. I agree and I do intend to pay smallest to largest, however it is fun tp play around and see what the differences are. For me, hyper only saves me 2 months on my payments. The program is great to help you figure out exactly when a debt is scheduled to be paid off, if you stick to the your debt retirement plan. I have found according to the software that my estimates were a little off.
Pyroguy, you just blew up my mind! What is the advantage to focusing on balance? One could argue that high-balance goes first because a balance above 25% of the total credit available is a ding on the FICO calculation. I focus on rate. Is your balance focus psychological? I know you've advocated for psycholigical motives here before. Are they at work here?
ReplyDeleteAnonymous -
ReplyDeleteSmallest Balance is what Dave Ramsey teaches and yes it is psychological. You focus on the smallest balance, and when you get it paid off, it encourages you to focus on the next debt. When you focus on that 2nd debt you take all of your excellerated payment for the smaller debt and apply it to the next debt, helping pay that debt off, again encouraging you to move to next and so on and so on.
i see a psychological reward but i prefer a financial one! ;)
ReplyDeleteit will be financial when your debts are paid and all the now free money is going to savings and mutal funds.
ReplyDeleteBut Kevin, if you focus on rate rather than balance, the total debt is paid faster. That's what I mean by financial reward.
ReplyDeleteI just purchased the TDIW system 3 days ago and have listen to all the cd's I am now working on the windows software and would like to know where I can find the free printable manual for the software. thank you
ReplyDeleteAnonymous -
ReplyDeleteI am not sure...you might try TDIW.com
it's the "members only" website.