We here at Urban Beardsman believe strongly in getting sh*t done and embracing our independence whenever possible. Unfortunately, life throws obstacles at each of us that might require borrowing resources from other parties to achieve our goals and, in turn, incurring debts along the way. Although there’s no perfect way to get out of debt, unless you stumble upon a pot of gold, you do have options when it comes to which strategy you want to use.
According to Beardbrand founder, and one-time financial adviser, Eric Bandholz, there are three main ways to become debt free. The beginner’s, or snowball, method involves focusing on the debt you have with the smallest balance and paying that one off first. Once you’ve rid yourself of that one, move on to the next smallest and so on and so forth until you pay off your final and largest debt. The intermediate and most agreed upon method focuses on paying off your debts based on whichever one has the highest APR. The riskiest way and the one requiring the most outside knowledge and/or experience involves paying the minimum on all of your debts and using the money you would be using on larger payments for investments.
Which should you use? Well that’s your decision to make after talking to a financial adviser or your spouse or both. For any other questions, tweet us at @bandholz.