Life Lesson 3: Avoid Debt


Debt will kill you. The fastest way to waste your income is to pay interest. The fastest way to maximize your income is to earn interest. As long as you have debt (like most of us who graduate from college do), then every penny you spend is borrowed money.

Avoid debt at all costs. If you have debt, make a conscious effort to get out of debt as fast as you possibly can. Dave Ramsey’s plan is the easiest and most effective that I have found.

Go to his website and take advantage of the $10 special this weekend to buy The Total Money Makeover for a great price of $10. Act now!

7 steps to get out of debt

  1. Get $1,000 cash in the bank as a baby emergency fund
  2. Pay off all debt (except for house) smallest to largest
  3. Build up your emergency fund to 3-6 months of expenses
  4. Invest 15% of household income into Roth IRA and other pre-tax retirement
  5. Begin building college fund for children
  6. Pay off home early
  7. Build wealth and give money away like crazy
About Joel Wagner 522 Articles
Joel Wagner (@sywtt) began teaching band in 2002. Though he had a lot of information, his classes were out of control. He found himself tired, frustrated, disrespected by students, lonely, and on the brink of quitting. He had had enough. He resigned from his school district right before spring break of his second year and made it his personal mission to learn to be a great teacher. So You Want To Teach? is the ongoing story of that quest for educational excellence.

5 Comments on Life Lesson 3: Avoid Debt

  1. I have to disagree with the pay off the smallest debt to the largest. You should pay off the debt that is charging you the highest interest. That keeps more money in your pocket because you are paying less interest. Other than that, your advice is very good.

  2. Julie, paying off the smallest debt gives you a sense of accomplishment much quicker. I have found that the largest debts tend to be the ones with higher interest rares. Or the other way around.

    Mathematically, it may make more sense to do it your way as it is both faster and cheaper. The problem for me is that the $100 in interest charges and one month of payments that I might earn by going the mathematical route is far out weighed by the reduced stress I gain by only getting one credit card bill a month.

    Either way, do what works for you.

  3. The biggest thing ever to help our family was reading Total Money Makeover by Dave Ramsey. Not only did we cut our credit card bills in half each month, but we only took out half the amount of trash as we normal did, one can instead of two! Amazing how far a little effort goes. :)

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