In honor of The Debt Movement, an effort for consumers to join forces to pay off $10 million in debt over the course of 90 days, I’d like to talk about one of the debt reduction strategies known as the siege.
It’s true that the debt siege won’t get you out of debt really quickly, but it can help you feel better about paying down your debt, and it can help you keep the whole process manageable.
When you think of a siege, the first thing that comes to mind is slowly wearing down your opponent. The debt siege can be thought of the same way: You are slowly wearing down your debt. The idea is to keep doggedly at your debt until you pay it off, no matter how long it takes.
The debt siege is accomplished by following these steps:
You can order your debts according to the “debt snowball” method (smaller debts paid off first) or the “debt avalanche” method (higher interest paid off first), or you can even just pay toward whatever debts you want with no method — although a plan can help you pay off your debts more efficiently.
The point of the debt siege is to make paying off your debt manageable over time. It doesn’t require any huge changes or sacrifices. As a result, you have to be prepared to pay more in interest during the course of your pay down efforts. You can increase the effectiveness of your debt siege, though, by looking for ways to earn extra money to put toward the effort. That way, you can breach the walls and defeat your enemy a little quicker.
The debt siege is most effective for those who don’t feel that it’s practical to take extreme measures to pay down debt. If you have teenage children, it might not make sense in your situation to sell everything and deny yourself any pleasures until the debt is gone. The debt siege is a fairly gentle approach to debt pay down. It’s effective in the long-run, but you have to be willing to accept that you will pay more in interest, and that it might take you five to seven years, instead of three to five.
Another scenario in which the debt siege works well is if you and your life partner have differing views of the urgency of the situation. If you want to pay off your debt, but your family isn’t on board paying debt or making huge sacrifices, then the debt siege can make a great compromise. You can make progress in paying off your debt, without totally discomfiting your life partner.
Look at your situation and get started. Even though the debt siege might not be the fastest and most efficient way to pay off debt, the fact of the matter is that it is progress. It’s a way to make sure that you are at least making some effort to pay down debt, and that you will eventually emerge victorious.
What do you think of the debt siege? Would it work in your situation? Or does it not go far enough?
The articles are written by personal finance enthusiasts (not certified professionals) based on their personal experience. What works for them may or may not work for you, and you should always consult a financial advisor before making important financial decisions.
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