Checklist #03 · Debt
Debt Payoff Strategy
Choose and execute the optimal debt payoff method based on your balances, interest rates, and psychology — then track your way to zero.
27 action items~20 min to complete5 sections
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Take Inventory of All Debts
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List every debt: creditor, balance, interest rate, and minimum paymentKey
Note whether each rate is fixed or variable
Identify any debts in collections or past dueWatch out
Check for prepayment penalties on any loan
Calculate your total debt balance and total monthly minimumsKey
List every retirement accountKey
List all life insurance policiesKey
List bank accounts and investmentsKey
List any annuities with beneficiariesKey
Note accounts without designationsWatch out
Identify accounts with transfer-on-death featuresAction
Document digital assets and accountsKey
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$6,501
Average U.S. credit card balance per household (2024)
21.5%
Average credit card APR — at this rate, debt compounds fast
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Choose Your Payoff Method
0/6 completed
Understand the Avalanche method
Understand the Snowball methodKey
Run the math on both methods for your specific debtsAction
Honestly assess your motivation style
Select one method and commit to it for at least 6 monthsKey
Identify your first target debt
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Find Extra Payment Money
0/4 completed
Calculate your current monthly surplus after essentials and savings
Identify 2–3 discretionary budget cuts to free up moreAction
Plan to apply windfalls to debt (tax refund, bonus, side income)Key
Set your monthly extra payment amount as a fixed number
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Execute & Track
0/15 completed
Set up autopay for all minimum paymentsWatch out
Make your extra payment manually or via a second auto-transferAction
Create a visual debt payoff tracker
Celebrate each debt paid off before attacking the next
Roll the freed minimum payment into the next debt immediatelyKey
Open IRA at Low-Cost ProviderAction
Select Your InvestmentsAction
Automate Monthly ContributionsAction
Contribute for Prior YearWatch out
Review Investment Fees and ExpensesKey
Set Up Beneficiary DesignationsAction
Document Your IRA DecisionsAction
Prioritize Tax-Loss Harvesting OpportunitiesAction
Calculate Estimated Tax Impact FirstWatch out
Reinvest Dividends Into Underweight AssetsAction
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Stay the Course
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Review your debt list and progress monthly
Reassess if a major life change affects your income or expenses
Do not take on new consumer debt during the payoff periodWatch out
Consider balance transfer or refinancing only if it shortens payoff — not if it extends it
Celebrate full debt payoff and redirect all freed cash to savings/investingKey