Emotional bill prioritization

by Jen (April 20, 2007)

This may sound wacky, but some of your debts are more depressing to you than others. If you identify which ones are getting you down, you can do two good things for yourself for the price of one.

Think about each of your debts, one at a time. Did the student loan give you more of a trapped feeling than the car loan? Or was it the credit card debt that most freaks you out, because the interest rates aren’t under your control? Generally, debts are what most bother us, but what about savings? Is not having an emergency fund stressing you out even more than being in debt?

Make a list. Put the item that bothers you most at the top. Then the second worst offender, then the third and so on. Now you know what order of debt elimination will give you the added benefit of reducing your debt stress and making you a little bit happier. Now you can look at ways to tackle "first things first".

If you put student loans at the top and credit cards somewhere down the line, this opens up a couple of options: with good credit, you could move the loans to an interest free (or very low interest) credit card. Don’t just wait for balance transfer offers: call your credit card companies and tell them you’re canceling. They’ll almost always ask why, at which point you tell them you’re only using cards for balance transfers now, and their interest rate is higher than your others. They’ll often make a sweet offer. But consider how long it’s going to take you to pay this off, and whether it’ll stress you out knowing the interest rate could go up if you’re unable to bounce the debt from card to card (I’ve been doing this for several years, though, and while I’ve paid a little in balance transfer fees I’ve yet to pay a dime of interest).

Another option is to just throw all your extra money at the student loan debt until you get it paid off.

In the end, you’re going to pay these bills. This is just a way to get a little emotional bonus with the process.

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Posted in Frugal
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