Why a Debt Hit List will make you a Debt Slayer

I have been implementing changes in my life recently to start living a debt-free life.  My favorite tool is a debt hit list and has been responsible for providing me with much clarity.

The power of the debt hit list is multifaceted:

1. Order in which you will pay your debts
2. Sorted in descending order by interest rate
3. Provides a structure on where to focus your extra cash

The goal of the debt hit-list is to sort debts by prioritizing highest interest debts first.  For me to create a successful plan, I must first execute the actions of the plan.  Anyone can generate extra cash by cutting expenses or creating value for others through a side hustle.

It’s that simple!!

Why not invest my money instead?

I am choosing to apply all extra money to my top priority on my debt hit.  Paying interest to the lender for any loans or credit card balances is a guaranteed loss.  Yes, your investments may grow, but does the interest they earn offset the interest paid by retaining this debt.

In my case my investments in my 401k and IRA and their growth don’t offset the interest that I am paying each and every month.  That isn’t to say that I shouldn’t be investing into a 401k or IRA, I certainly recommend to invest at least the minimum to get the matching.  Leaving money on the table is never a good idea.  By getting the maximum match you are greatly increasing your tax differed earning potential.

A debt hit list is a tool that can aid you in paying off your debts and giving you more freedom on how you choose to live your life.  I hope that you will consider creating a debt hit list for yourself and let me know how it works for you!