The best way to make your pyramid grow
The real benefit of pyramiding is psychological. It gives you a game plan to follow and helps you see results more quickly.
Rather than spending years paying small amounts without any apparent significant progress, you’re heaping all your money on a single debt and watching it disappear.
The secret to making this system work is to look for any and all extra cash you can redirect to your debt. Add a couple hundred dollars to your payments each month, and you will zoom through your debt repayment plan in no time.
Reaching the $10,000 mark
You may be looking at the headline of this article and thinking there’s no way you could possibly pay off $10,000 in debt over the course of a year.
True, if you live on a $20,000 income, you’re probably not going to be able to pay off $10,000 without breaking a sweat. However, for many middle-class families, it’s probably doable.
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.
Some of that money is going to interest, but you’re paying down the principal as well. Pull up your account statements to learn exactly how much of your monthly payment goes to principal and how much goes to interest.
Then, subtract the total of your current monthly principal payments from $833. For example, if you’re currently paying $333 toward principal each month, you will need to come up with an extra $500 each month to reach about $10,000 over a year.
There are a number of ways you could do that. You could:
- Try these money moves to save $1,000.
- Consider one of these extreme ways to save money.
- Sell your excess stuff.
- Get a second job.
- Try some odd and unusual ways to bring in more cash.
You can even try one of these 107 ways to make extra money.
If you just can’t get a handle on your spending, try a budgeting app, such as You Need a Budget.
If you need more assistance, stop by our Solutions Center and look for help with your:
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 over the course of a year.
And remember, you don’t have to wait until Jan. 1 to start. Pick any month — like this month — and run the calendar out over one year.
Have you paid off a large debt in the past? Let us know how you did it by commenting below or on our Facebook page.
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