Paying off debt, honestly guys, is one of the best things you can do for you and your money. But here are four ways to pay off debt that I do not recommend. Number one, do not use a debt consolidation company. Don't pay a company for something that you can do yourself. Number two, don't borrow from friends and family. A lot of people are like, "Well, I'd rather owe someone that I know versus a bank." No, you change the relationship in your life when you owe money to someone or someone owes money to you.
Don't do that. Number three is moving your debt around. So, some people are like, "Well, I'll just take out a credit card to pay off the HELOC to whatever, whatever, whatever." They're moving debt around. Don't do that. And number four, last but not least, do not pay off the highest interest rate first. When you're paying off debt, you want to pay off the smallest debt first. So list out all of your debt, smallest to largest, regardless of the interest rate. Pay minimum payments on everything and attack the smallest debt first.
Pay that smallest one off first because so much of personal finance is not as much about the interest rates and the numbers and doing the math. It is so much about you. And when you get quick wins, you're going to be more motivated to stay in the process. So, good luck paying off that debt. It's one of the best things you can.
