LANSING, Mich. (WLNS) – If you’re someone who’s struggling with debt and needs tips on how to reduce it, local money expert Stephen Schiestel has some advice.
The first type of debt is real estate related. Second is vehicle loans. The third would be credit card debt, and the fourth would be personal debt like boat loans, hobbies, etc.
First, establish a goal. Eliminating all real estate debt is the number one priority, Schiestel said.
“The first strategy is what I call the spreadsheet strategy. And the second would be the personnel finance strategy. The spreadsheet basically says, ‘let me take all my loans and let me order them from highest interest rate to lowest interest rate and attack the highest interest rate loans first,” said Schiestel.
“That makes the most,mathematically correct way of approaching. The second approach is the personal finance approach. And this is the approach that’s popular. That was popularized by Dave Ramsey, where instead of ranking our debt from, and by interest rate, we instead rank at from the amount of the debt and rank it from the lowest dollar amount of debt to the highest dollar amount.”
“Using the strategy, we’re going to continue to make the required monthly payments. However, all of our additional time energy, extra cashflow is going to be focused on that lowest or the smallest dollar debt. And then that allows us to pay that off as fast as possible to get us a checkmark or a scratch on our to-do list.”
Check out Schiestel’s full advice in the video above.