Today is the day! Part 2

Which bill do I start with?
I have read many ideas on how to go about this. I heard that you should go for the one that has the highest interest rate. For me, I preferred the Dave Ramsey’s “Debt Snow Ball” method. List your debts from lowest to highest and start tackling the lowest debt.

For example: Loan $500
Medical Bills $1100
Credit Card $6000
Car $12,000

You would pay off the $500 loan as quickly as possible while paying the minimal payment on your other bills. Once the loan is paid off take the payment that you would use on the loan and add it to the payment on the medical bills. You would do the same for each time you pay off a debt until you have paid off everything. Seems simple doesn't? You would be surprised at just how much of a motivator it is when you pay off your first debt.

There is one important point I forgot to mention. I have learned this hard way so I definitely want to share this. Even though you are working towards paying off your debts, don’t forget to factor in savings into your budget. I like it call it my “Murphy” fund. Even if it is as little as $10 to $25 per pay period it is best to put something away in case of an emergency.

Over the next few days I plan on covering some of my favorite financial books. If you have any that you enjoy, please leave a comment. I’m always looking for new books to help me on my debt free journey.