Jot down all of your account balances in descending order, from largest to smallest.

We’re talking about credit card debt, loans, your mortgage payment – everything. Don’t worry about your interest rate right now it doesn’t matter.

Now it’s time to play make believe.

Let’s assume your smallest balance is $300. Next to each balance, write down how much your minimum payment is.

Let’s pretend your minimum payment on six accounts is a total of $1300. I want you to plan on paying your minimum monthly payment on all but the bill with the lowest balance.


Next comes the fun part…

How much money do you have left over before paying those bills?

We’ll be conservative here and say it’s $1450. Pay out $1,300 on that big stack of bills and you have $150 you can apply to that small $300 balance.

Why should you do this? Because by doing this you can pay off a small bill in just two months and have a symbolic victory.

What this symbolic victory is intended to do is motivate you into taking further action to improve your debt situation. You didn’t fall into your pit of money problems – you jumped in one “easy” payment at a time. You won’t get out overnight, but with steady progress you can and will get out.

You can’t just snap your fingers and get out of debt. But this single spark will kindle thoughts of financial freedom and give you something to look forward to other than another 20 years of overwhelming debt.


Let’s quickly recap this technique:

  • Gather your bills and write down your balances in descending order
  • Next to that figure, jot down the minimum payment
  • Pay the minimum payment on all bills
  • Whatever amount of cash remaining gets applied to the bill with the lowest overall balance
  • Within as little as 1 to 2 months you have a zero balance on one bill

This technique is going to do something else for you two months down the road: You’re going to have the amount of that minimum payment not going out for bills each and every month. That’s money you can easily use to pay other bills.


A faster way…

There is a faster way, and depending on your situation you may be a good candidate.  Connect with one of our expert partners who specialize in debt consolidation of high interest debt. Our partners can provide you with a number of options, one of which may be the perfect solution for you. Request your free consolidation quote today.

Wishing you all the best.


This entry is filed under Debt Help Advice, Mortgage Advice.