Your Double Digit Interest Rates Need to Go
Most people start paying down debt by starting with the thing they owe the least amount of money on. And that makes sense; it's super easy to see quick results, and can be a powerful way to motivate yourself to stick to your new financial habits. If that is the most soul-supportive, nourishing way to get started, keep going. Do not change your habits just because of a best practice.
If you are interested in changing, or haven't started yet, many financial advisors instead recommend to start with your debt that has a double-digit interest rate attached to it. Why? That's because these loans are going to keep you in debt more quickly than others, and can easily balloon into a number that's unbearable. You can get a better return on your investment to pay this debt by tackling these, because not only will you still decrease the overall debt you owe, your long-term debt timeline will be significantly shorter.
Debt with lower, single-digit interest rates will generate more debt less quickly, so you have a bit of time to tackle those next. Start with the big ones, and move on. Debt with double-digit interest rates tends to be credit cards, and debt with lower interest rates tend to be student loans, mortgages, etc. We recommend making a list of all your current debt, and the interest rate, to help get a better sense of what you'll owe today – and tomorrow.