Create A Customizable Debt Pay Off Plan That Fits Your Needs

Are you ready to pay off your debt but have no clue where to start? Read the first post in my series about paying off your debt, then read through this series until you get to this post, our ninth in the series.

Everyone’s debt situation is unique.

That means that not everyone’s debt pay off plan will fit perfectly within the debt snowball or debt avalanche methods.

If you’re in that situation, that’s perfectly fine! Instead, you can create your own customizable debt pay off plan!

Don’t try to force yourself into a mold that simply won’t fit your situation. It doesn’t make sense to set yourself up for failure.

Instead, take the good from each method and add your own twist to make a plan that will work for you.

Not Every Debt Situation Is Black And White

When we were formulating our debt pay off plan we realized that paying off debt isn’t as simple as picking the debt avalanche or the debt snowball. 

There were more factors to take into account. Granted, our debt was a simple scenario because were only trying to pay off student loan debt.

First, some of our interest rates were variable while others were fixed. The other issue we had was some student loans were federal loans while others were private loans.

So how did we formulate our customized debt pay off plan? First, we figured out which debt was the worst offender of the bunch.

This was easy because our worst loan had the highest interest rate, was a variable loan and was also a private student loan. Next, we attacked that loan with everything we could throw at it.

It took many months before we had to start paying off our next loan. All we had to do in the time between picking our worst loan and completely paying it off was ensure that another loan didn’t because more urgent before we paid off the worst offender loan.

Luckily for us, nothing changed, but if it did, we’d simply switch which loan we were aggressively paying off.

Once we had our first loan paid off, we looked at our situation and figure out which loan was the next worst offender and aggressively paid it off. We then continued this process over and over again until all of our student loan debt was vanquished!

Some Variables To Consider When Formulating Your Plan

There are many different types of debt out there, so it is important you fully understand your debt situation. One key is knowing whether your debt is secured debt or unsecured debt.

Your debt is considered secured if took a loan to buy a car, a home or another large asset that you put up as collateral.

Your debt is considered unsecured if you simply signed your name to a loan, such as a credit card, a personal loan or a payday loan and didn’t offer any collateral.

What difference does it make? If you quit making payments on a secured loan, you can lose your car, your home or whatever other assets you secured the loan with.

If you quit making payments on unsecured debt such as a credit card, personal loan or payday loan, then the company will have to sue you and get a judgment in order to garnish your wages or force you to pay.

Either way, you should do your best to always pay your debt back and not make late payments.

Another factor to consider is the fact that there are debts with special treatment. Student loans and tax debt are two types of debt that are very difficult to get rid of.

Many people advocate paying these debts off quickly due to the fact that more extreme measures can be taken to collect on these types of debt. The government can take your tax refunds and garnish your wages to collect on these types of debt.

It is also important to know which of your loans have variable interest rates. As interest rates rise, so will your interest on your variable debt.

Most credit cards have variable interest rates, as well as some private student loans along with many other different types of debt such as adjustable rate mortgages. Fixed interest rate debt will not change the interest rate as rates rise or fall.

You’ll have to look at these variables and figure out which ones are the largest threats to your debt pay off plan. Figure out which loan you think is the worst offender then get started with your extra payments!

The faster you start paying debt down the faster you’ll pay it all off!

Next we’ll discuss growing your income, which you can read about here!

Which loan do you plan on paying off first? Will you use the debt snowball, debt avalanche or your own customizable pay off plan?

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. Now that I am finally on track to becoming debt free, I realize that there isn’t a one size fits all plan to reaching my financial goals. I really just try my best to stick to my budget and cut cost as much as I can. I know for sure that debt is not my friend, and I want him out… right now.

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