How to Pay Down Your Debt

“The ONE aspect of our financial lives that causes the most distress”

(cue Jeopardy music)

“What is DEBT?”


Yup, you guessed it (or maybe you’ve lived it). Debt is the number one cause of financial stress in the U.S. The “right” way to pay off that debt is a constant source of confusion. Even financial experts can’t agree on the best approach to tackle this debt trap. Fortunately, we have a tool that makes setting up a debt elimination plan a walk in the park.

PowerPay is a free tool that helps you quickly set up your debt payment plan AND shows you exactly how long it will take to be debt free. You’ll input your outstanding balance and the interest rate for each of your credit accounts and like MAGIC you’ll have a repayment plan that puts you on track to no debt.

Two strategies for paying down your debt

There are two basic approaches to debt elimination.

The “avalanche” method: paying the highest interest first. This saves you money in the long run because you’ll get out of paying more in interest. The avalanche method is usually the best method if you are trying to reduce the amount of interest you pay.

The “snowball” method: Pay off your smallest balances first, as quickly as possible. As you pay down smaller debts, you’ll have more money to put towards your bigger balances. you may want to choose the snowball method if you think getting some early wins will help motivate you.

Should I save or pay down my debt?

Many people ask, “Should I save OR pay down my debt?” We recommend a balanced approach to these two financial goals. It may make sense to reduce your saving while you pay down the debt, but don’t ELIMINATE savings. Remember, paying yourself first is the golden rule. Plus, you need emergency savings in case something unexpected happens. Even if you just save $20 each month, you will continue the savings habit you started.

To learn more about understanding your debt, check out this video.

Take Charge of Your Savings
Earn rewards for creating a brighter future
Sign up to save more

Recommended Articles

Sylvia’s Story: Home Ownership in the Future

Meet Sylvia, an HR Manager for the Clark County School District in Nevada. She’s a Las Vegas native who lives with her husband and two adult sons. What did your upbringing teach you about finances? Nothing! That’s why I’m in debt now. I don’t think I was ever taught how to save or how important… Read more

How do you balance debt and savings? Here’s what our research found.

If you’re paying down debt, saving money may be a low priority for you. After all, you’re probably paying interest on your debt every month, so paying off your debt more quickly means keeping more money in your pocket long-term. It’s harder to save when you have debt Our research found that Savers with a… Read more

Understanding Your Debt

Hi, I’m Saundra Davis, financial coach here at SaverLife. Today we are going to talk about one of the biggest financial stressors in many of our financial lives: debt. The “No Judgment Zone” So, the very first thing is remember the “no judgment zone.” Everything that you have done in your financial past that you’re… Read more