Paying off debt fast – Using the Pay It Forward system
Have you had enough of being in debt? Do you want to know what the fastest way is to pay off all of your debts? If you have more than one, how do you know which one you should focus on first for best savings to you?
The longer you take to pay off a debt that is incurring interest, the more interest and fees you are paying and the longer it will take. There are many ways of paying off debt fast but I would like to share one tip that I used in paying off our debt fast.
It is the Pay it Forward system – Paying off debt fast
Basically, as each debt is paid off, that debt payment gets added to the next debt payment.
Here it is explained in more detail.
Once you have figured out in what order your debts should be paid off, and you have set your weekly budget, you then focus on the first debt.
Once the first debt is paid off (and you’ve cut up that credit card or closed the account), you then tackle the next debt with the highest interest rate.
This is the most important part of paying off debt SUPER fast
The payments you made to the first debt will now be added to the payments that you are paying to this next debt.
And so on. Once that second debt has cleared, you will then add those payments to the third debt that you are paying off.
By now, your payments are snowballing and are getting larger. You are now paying off debt fast and interest costs are reducing as well.
It’s a better system than Debt Consolidation
When you get a debt consolidation loan, you are committed to a long term and one set interest rate for the length of that term. They may also charge you administration costs or loan fees.
However, if you follow the Pay it Forward system, then you will knock out the highest interest loans first, leaving you with the lowest interest loans last. By the time you get to these, you will knock these out really fast and with no loan fee or administration, fees added. You will pay your debt off faster – but you must be strict with yourself and don’t sway from your set budget and goals.
I have put together a free guide and worksheet similar to what I used to put my debts in order and knock them out according to what their interest rate was. Use can use the worksheet to list your debts, pin it on the wall and watch as you cross them off as they get paid. It is extremely satisfying!
Focus is key
Stay focused on your ultimate goal, whether that is to be debt free or simply to reduce your debt. Stick to that budget that you set in the beginning and keep paying those loan payments to the next loan. If you do not follow these simple rules, then you will not pay off your debt as fast as you could!
- Which debt should I pay off first? – Free guide & worksheet to help you
- Reduce debt super fast! How I paid off one credit card in just 10 days
- Avoid paying credit card interest – See how I went from paying $260 per month to $0 in just 4 weeks
Share your thoughts
Have you been successful at using the Pay It Forward system? Try it out and tell us what you think! Share your stories in the Comments Box below and help others achieve their personal financial freedom.