Paying off Debt

In this day and age, debt seems as ever-present in our lives as taxes, and can be just as stress inducing as many illnesses. I regularly listen to Dave Ramsey's call in show and hear people describe how they are working to pay off large credit card debts, car payments, foreclosures, and others. In every case of someone calling who is still dealing with a problem, I can recognize a lot of anxiety and even guilt over the situation. In every case where people are calling to scream "We're debt free!" (he has a part of his Friday show dedicated to these calls) I can distinctly hear the relief in their voices. In short, debt weighs on my soul as much as it does on the bank account.

I have not personally read Dave Ramsey's books, nor have I taken one of his courses. I do know from observing friends and associates who have used his program that it works when it is followed. What his program entails, basically, is paying only minimum payments on everything while putting all the extra payments on the smallest amount of debt owed until it is paid off, then the next, and the next until the largest amount is paid off (or all that is left is a house payment). He calls this the Debt Snowball. Another strategy that makes sense to me is to focus on the highest interest debt until it is paid off, then the next highest interest, and so forth, the logic being that reducing the amount of interest owed faster will increase the amount of money going to principal and thereby to paying off the debt faster.

What does debt reduction have to do with "Making That Money"? By getting interest charges out of my life, I increase the amount of money I bring home to save, invest, or spend, which helps me make more of "that money". I also increase the emotional and spiritual capital in my life dramatically by getting the debt out of my life. Very soon my wife and I will only owe on our home, and I cannot begin to describe how good it feels to be looking forward to being rid of short-term debts. I personally dislike debt. I hate owing anyone anything. We'd also love to pay off our house as fast as possible and be trule debt free for that reason. Then I won't have to worry about a rebate check or a government bailout plan to feel secure in the knowledge that what is mine is truly mine, and I do not have to surrender it to anyone.

-- Robert