hey this is carey from payoff! todayi'm going to answer the question, "should i save money or pay off debt?" let'ssay you have a hundred dollars and you're trying to make a decision,"what should i do with that money? should i put it toward paying off debt or should i say that money?" i like to usethe rule that i called the 10
Best Way To Pay Off Credit Card Debt, x rule. and what i base this 10x rule on is the interest rate of the actual debt that i have. so let's say for example ihave
a mortgage and that mortgage is at 4percent. if i use the 10x rule on that then iwould say 4 percent times 10 equals 40 percent. so what i would dothere is, if i had a hundred dollars i would take40 percent or forty dollars of that and put that towards paying off the debt. iwould take the balance of that and i'd save it if that would make mefeel good. let's take another example. let's say you have a credit card balance. and let's say you've got the average interest rate on
a credit card which is about 15 percent. if you multiply that times 10 and now were over 100 percent. so the point there is if you have a highinterest balance you wanna put pretty much all of theavailable money you have toward paying that off because you're gonna have a really hardtime getting anywhere close
to that kind of return in saving thatmoney or investing that money. so hopefully this 10x rulecan be used as a guideline for you as you start trying to make thatdecision of what to do with that money. hey this is carey. hope you liked that videoand that it added a little bit to your financial knowledge. feel free to like it or comment belowand you're also welcome to ask any questions that you have and i'll try toaddress those with future videos. you can also subscribe we'llalert you when we put up new ones. have a great day!
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