I paid off 30k of debt in 1/4th the time with this method #debtpayoff #debtfree #financetok #financiallyfree

I want to show you how to pay off your debt faster without having to pay more money or make larger payments and this takes little to no extra effort. Let's say your debt balance is $1,000. Let's go over first what most people do and this is where you make the minimum payment every 30 days. What this is going to look like would say is standard. Most cards are going to have a minimum payment around $40 for a $1,000 balance. Now you think that $1,000 minus a $40 payment is going to equal 960 remaining. Wrong. So actually, you're paying an interest anywhere from 25 to 28% on credit cards, so 25% of that $1,000. So we're going to go modest and say on 25%, you're going to be paying $20 in 80 cents per month in interest. This gets removed from that payment, so your $40 payment gets taken $20 and 80 cents out just to pay that bank interest, so you're actually only paying $19 and 20 cents to your principal or to your overall balance. So your actual balance after your minimum payment is $980 and 80 cents. This is not the way you want to be going about this. This is going to make paying off your debt way longer. So here's what you're going to do instead. Every single week, you are going to make a $10 payment. This is still going to end up being $40. You paid $40 here. You're paying $40 here by the end of the month, but here's where it's different. Week one, your balance is going to be $990. At the end of week two, it's going to be $980. At the end of week three, $970, week four, $960. Why this matters doing these payments like this is your interest will go off of the new balance. So instead of paying 25% off of a thousand, you're paying 25% off now $990, $980, $970, $960, which means your interest goes down. You won't be paying $20. You'll be paying a lot less. More of your money, more of your payment of that $40 in that total month, is going to go towards your principal, your actual balance. So this is going to pay off your debt much, much faster. This is called micro payments. I use this exact method to pay off $30,000 worth of debt and the fraction of the time that I would have it would have taken me if I was doing the minimum payment only, and this allows you to make sure more of your money is going towards the actual balance and not just paying the bank interest, which is how they make money off of us. So the faster you can pay down that principal, the less interest you pay, and the faster you will be out of debt.