How Long Will It Take to Retire Your Debt?

Two things I have preached over and again on this site are budgeting and patience. How long you have to budget for your debt retirement and how long you have to be patient depends on the amount of your debt.

Most people have no idea how long it will take them to wipe out their debt at their current rate and they would be shocked if they did find out. I came across an interesting tool that will allow you to not only see how long it will take you to pay off your debt at your current payments but it also tells you how much you can save in interest by increasing your payments.

Unfortunately the majority of my debt is credit card debt so this was a very interesting tool for me. Here’s a quick example of what I am talking about. I currently have a $1,944.37 balance on one of my credit cards with a minimum payment of $63.00 at 28.24% interest. By just making the minimum payment it would take me 14 years and 4 months to pay it off and I would have paid a total of $3,583.83 in interest alone.

Now, check this out. If I up it to my current payment of $100.00 per month then it would take me 2 years and 2 months to pay it off and my total interest paid is $603.12. However, if I’m able to budget an additional $50.00 a month to allow me to make a $150.00 payment I’ll be free from this card in 1 year and 4 months only paying $337.93 in interest.

Remember you have to have a plan if you are trying to get out of debt and this is the perfect tool to help you devise that plan. Start by paying off your smallest balance first and then work to the next smallest amount until you find yourself debt-free. It’s not going to happen over night which is why patience is a must. A debt-free life is out there waiting for you but you have to be disciplined enough to attain it.