Let’s look at the numbers.
To pay off $10,000 in debt, you need to pay off about $833 a month, and you’re probably already paying a big chunk of that.
Granted, some of that money is going to interest, but you’re paying down the principal (your debt) as well. Pull up your account statements to learn exactly how much of your monthly payment goes to principal and how much is being eaten by interest.
Then subtract the total of your current monthly principal payments from $833. For example, if you’re currently paying $333 toward your principal each month, you’d need to come up with an extra $500 each month to reach $10,000 for the year.
There are a number of ways you could do that. You could:
- Try these five money moves to save $1,000.
- Try one of these extreme ways to save money.
- Sell your excess stuff.
- Get a second job.
- Try some odd and unusual ways to earn extra money.
Between saving money and earning money, there are plenty of ways to come up with an extra $500 a month to put toward your debt pyramid and hit a $10,000 payoff for 2016.
Are you planning to pay down your debt next year? Or are you already using a debt pyramid? Let us know how it’s working for you in our Forums. It’s a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.