Section 2: Building Your Financial Foundation
This is EXPENSIVE MONEY!
“The borrower is slave to the lender.” Proverbs 22:7 NIV
High-interest debts are usually debts with interest rates higher than the average return you can get in the market. These debts will hinder your progress in building wealth.
Debt Payoff Methods
Debt Snowball
This method focuses on psychological motivation by paying the smallest balance debt first and working your way up to your largest balance debt. This will provide small, immediate wins as you clear away smaller debts, decreasing your list faster. This is the method Dave Ramsey recommends.
Debt Avalanche
This method prioritizes cost efficiency by paying off the debts with the highest interest rates first. This makes sense financially as it will save you more money in interest over time, but it may take longer to see progress. If you get discouraged easily, then the debt snowball method may be better for you.
Choose the method that aligns with your motivation and financial goals!
Use the worksheet below to view and track your High-Interest Debts. Choose the best debt payoff method for you, and begin tackling and eliminating those high-interest debts so you can break free from the system. Attach this to your Annual Financial Checkup workbook for future reference.
Downloadable Worksheets
HIGH-INTEREST DEBTS Worksheet
This worksheet is also included in the Annual Financial Checkup Section 2 bundle.
Section 2 Annual Financial Checkup bundle.
This bundle includes all the worksheets for Section 2, including the HIGH-INTEREST DEBTS worksheet, in a single, easy-to-use PDF download.