The most common reason people fail to achieve financial goals is their debt payments consume all of their discretionary money.

Often the only way we can buy a home is to take on mortgage debt—and we consider such debt acceptable.

Often we take on debt to purchase a car; otherwise we might not get to work. Such debt is borderline “OK.”

And student debt? Let’s hope we have a higher-paying career because of it.

But all other debt—most often credit card debt—is to be avoided at all costs and to be paid off as quickly as we can.


  • Organize your debt by principal amount, interest rate and minimum monthly payment.

  • Commit to a specific dollar amount that you can pay each month as an “extra” payment against debt.

  • Pick the debt with the lowest principal amount, and add that extra payment to the minimum payment to pay it off early. Pay the minimum amounts on all other debts.

  • Alternatively, start paying extra amounts to the debt with the highest interest rate.

  • Don’t take on any more installment debt!