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Let's tackle debt

Are you like most people, that carry some kind of debt balance from month to month, credit cards, a mortgage, student loan, auto loan, etc? Debt can be overwhelming but you can tackle it with the right game plan in place and a little discipline. Let's understand what kind of debt you are dealing with.

Secured or Unsecured: What’s the Difference? All debt falls into two categories: secured and unsecured and are considered fixed (equal monthly payments like a mortgage or installment loan) or revolving (minimum payment changes based on total debt amount like a credit card).

Secured – This type is asset-based where the asset is used for collateral. Your mortgage or an automobile loan are examples of a secured debt.

Unsecured debt isn’t tied to any asset. Credit cards, medical debt, student loans, personal loans, etc. fall into this category. While some debt like your mortgage or student loans can be considered good in the sense that your home or education will increase in value, paying them off quickly can put you in a much better financial position sooner rather than later!


Dave Ramsey in his financial training talks about the snowball effect. Here's the steps he recommends.

Step 1: List your debts from smallest to largest regardless of interest rate.

Step 2: Make minimum payments on all your debts except the smallest.

Step 3: Pay as much as possible on your smallest debt.

Step 4: Repeat until each debt is paid in full.

When getting out of debt myself, I tried this strategy and it worked! Give it a try and let me know how it worked for you!


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