Before reaching a destination, must identify the starting point.
On some level methinks has done a bit of this, but not in the correct/most effective way.
Edelman’s rule? Four columns, many rows …
| Creditor name | Balance owed | Interest rate | Minimum payment |
Would add one more column: Date of info / Snapshot in time. So slight edit …
| Date | Creditor name | Balance owed | Interest rate | Minimum payment |
First creditor listed is the one charging the highest interest rate … in effect, the most expensive of all the debts.
Although the advice is not to add to the debt balances while trying to eliminate them, modern life – such as it is – is hugely expensive, and some payments cannot be made with cash.
Options?
Dedicated DEBT/credit card for recurring charges (lowest interest rate possible) and/or
Establish a separate bank account w/DEBIT (i.e., cash) card to make those payments.
Edelman adheres to the “snowball method,” á la Dave Ramsey, but with the avalanche effect.
Pay the minimums on everything then devote all additional funds (ha! what additional funds, where?) to the creditor charging the highest interest rate … rinse, recycle, repeat.
Edelman also recommends using any and all available funds … stocks, bonds, cash on hand, baseball cards, sell that thing that’s just been sitting … and throw it at the debt. Side hustle, online sales, EMG garage sales, work at generating additional monies dedicated to eliminating the debt.
Controversy Alert! Eliminate debt by getting more … debt.
… i.e., consolidation loans BUT use them to lose them.
Sidebar digression: October 2023 did exactly that … got a big chunk of $$$ and used it to pay off …
… eh-ver-ree-thing.
And then the poo-flinging, face-tatted monkey came swinging into view aaaaannnnnndddd … so much for that. BUT but totally agree with the advice. Was making good progress when borrowed with intent to pay off in full … so there’s that.
Those 0% balance transfers are awesome, but if at all possible and ASSUMING THERE IS THE PERSONAL DISCIPLINE TO DO SO … get a lump sum to pay off all consumer debts – credit cards, personal loans, BNPL – and then dedicate debt spending to eliminating that debt.
Added benefit: $1000+$$$ emergency fund is much easier under this scenario, as one bigger payment typically eases the pressure off the SPENDING PLAN than throwing cash at a bunch of little debts every month.
YMMV but methinks this works.