We Make Money Easy Episode 2 – Debt

Andre and Phil talk about how to pay down your debt.

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Show Notes:

Phil recommends paying off credit cards in the following order

  1. Credit cards with annual fees
  2. Credit card with highest interest rate next
  3. And finally, credit cards with lower balances

Andre recommends paying off credit cards using the snowball method

  1. Paying off store credit cards first (Circuit City, Best Buy, etc…)
  2. Paying off the lowest balance card next
  3. Finally, the largest credit card balance

Phil and Andre both agree that the next thing you should tackle are loans on depreciating assets, like a car payment.

Work on student loan debt, as it can’t be discharged in bankruptcy, but when possible pay off debt that is tax deductible last.

Paying off debt has a snowball effect, you’ll save enough money for a vacation or a down payment.

Phil recommends reading The Millionaire Next Door

Is a fancy car worth the payment? Figure out what’s the most important one thing in your life that will have long-term value, and spend money towards that while building savings.

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