Debt is a common problem in America. Many people think they have it under control, but plenty of people are drowning in debt.
Ever-increasing debt causes stress in you and your relationships. You’re always paying interest and the balances never seem to move except to increase. Living paycheck to paycheck leads to covering emergencies or financial needs with credit instead of savings, while debt grows and grows.
All of your bad feelings about debt can be put aside for a moment so you can think about how you can start eliminating debt.
The debt roll-down method helps to aggregate your debt payments over time so their power is used to not only reduce how many debts you have, but reducing how much interest you’ll pay before you pay off your debt for good.
It is a pretty simple exercise. Write down all your debts including their balances, minimum payment and interest rate.
The next part is seeing how much extra you have in your budget to put toward paying off your debt. Even if it's an extra $25 for now, take that money and either put it toward your highest interest rate or your lowest balance, whichever one will help you get the ball rolling.
Add that extra debt money to the minimum payment of the debt you chose. Once it has been paid off, take all the money from that debt and put it toward the next smallest balance or highest interest rate.
As you continue rolling down your debt payments, you’ll end up with the money you had been putting toward three, five, nine or 15 debts going to pay off your final debt. For many people this means putting as much money as they can toward their mortgage.
When you’re debt free, take your debt money and start saving it. You will have moved from paying other people interest to collecting it yourself.
- Write down all your debts.
- Find extra money in your budget to put toward debt.
- Focus money toward chosen debt.
- Roll debt payment to next debt.
- Pay off all your debt.
Use our debt roll-down tool or if you're a Premier or Coaching customer use the Debt Center in Mvelopes to see when you’ll be debt free. For better results, set deadlines to have each individual debt paid off early or set a goal to find extra money to put towards your debt.