SHREVEPORT, La. (KSLA) - Many of you decided to save money in the New Year and may not know where to start.
In our latest KSLA Café conversation on Facebook, financial advisor Colin Evans showed me and Domonique Benn how to knock down debt. Evans explained what a ladder concept is and how you can do it.
“Put the debts in order from highest debt down to lowest,” said Evans. “Sometimes people think they’re going to put more on this credit card payment. But if you take the more that you’re paying and put it on the very lowest-numbered debt. Then what you start doing is almost laddering or ratcheting it up.”
To put it in easier terms, make a list of debts from the highest amount owed to the lowest. Don’t worry about your interest rates.
Starting the mortgage is the most logical place to start. For most people, that’s the most substantial debt.
Next, would be your car payment followed by your credit cards.
After that list any other debts you’ve acquired including small debts such as retail store loans or credit cards.
Start at the bottom and work your way up getting those bills paid off. Once you’ve paid off your smallest debt.
The following month, use the money you would’ve paid towards that bill you paid off last month, towards a new debt on the list.