How to Create a Financial Plan to Pay Off Debt

What is the Best Strategy to Pay Off Debt?

What works "best" will differ from person to person, but there are a handful of battle-tested tools and methods you can try and see which fits your goals and preferences:

• The Snowball Method - As the name suggests, this debt payoff strategy calls for you to tackle your debts in order of size, starting with the smallest. In the meantime, you make minimum payments on all your other balances until you work your way up to them. Once you've finished paying off your smallest debt, you move on to the next one, taking the cash you were committing to the first debt and rolling it over. As you zero your balances one after the other, the amount you can pay grows larger, creating a snowball effect and (ideally) allowing you to pay down your debts faster.


• The Avalanche Method - This strategy has you focus on the debt with the highest interest rate first, while making minimum payments on your other debts. Although it may take longer to pay off your balances, it'll save you more money in the long run compared to the snowball method.


• The Combination Method - Though not an official payoff strategy, we used this handy title to describe an approach that combines the snowball and avalanche methods. Say you have so many balances that it's become overwhelming. You may want to start with the snowball method to knock some of the smaller ones out quickly. Then, once you
  have more room to breathe, you can swap to the avalanche method to start reducing your interest payments.


• Debt Payoff Planners - These can be budget spreadsheets, worksheets, apps, or software programs that help you organize and manage your finances to pay down debt. Printable sheets are a great way to stay on top of your debts and track your progress, but many modern apps and programs do all that and much more. For example, they often do all the calculations for you and allow you to sync your accounts directly, giving you a real-time look at your finances whenever you need it.

Paying off multiple debts takes time and consistency. It's mentally taxing to keep up with over the long term. That's why the best strategy or strategies are the ones you're confident you can stick with for years.

Can a Financial Planner Help You Get Out of Debt?

Absolutely. These professionals are trained to help you draft a blueprint for your financial future and execute it, and this often involves paying off mortgages, student loans, car loans, etc.

However, their cost can make them an unrealistic option for many people, especially those struggling with a lot of debt. It's also important to ensure you're working with a certified financial planner who has your best interests in mind, as it's very common for people to parade themselves around as professionals without the proper certifications and fiduciary commitment.

Is a Debt Payoff Planner Worth it?

If you have a million things on your plate and you're worried about staying consistent and motivated with your budgeting, then yes. Debt payoff planners are definitely worth it.

Even if it's a simple spreadsheet, these tools can give you the structure and inspiration to keep going when things get tough. But depending on the payoff planner you pick, you could have a Swiss Army knife of financial management at your disposal.

With an interest cancellation software like the Money Max Account, you get the organization of a budget worksheet with the precision of cutting-edge technology powered by advanced algorithms and banking strategies.

This program brings all your accounts together to one secure location, lets you create custom goals, and serves as a "financial GPS" that constantly calculates the fastest route to debt freedom, adapting to changes in financial situation change.

With a tool like this doing the heavy lifting for you, tackling multiple debts at once is as simple as following directions on your maps app.

Putting the Pieces Together

Creating a financial plan to pay off debt is all about building something that best fits into your lifestyle. Using what we've discussed so far, the quick guide below is a great place to start:

1. Make note of all your debts, their interest rates, and your monthly payments.
2. Create a realistic budget that allows you to balance essentials with paying off at least one of your debts.
3. Explore the above strategies to find the ones that work for you, including apps and debt management software.
4. Don't be afraid to enlist the help of a professional if you feel you need it.

If you're unsure which strategies would be best for you, reflect on your lifestyle and your strengths and weaknesses when it comes to managing money.

For example, if you have the time and discipline to fill out spreadsheets and track your progress manually, then those are the payoff planners you should go for.

If you're not confident building a plan on your own and you'd rather leave it up to a trusted professional, you may want to look for a financial planner to team up with.

And if you'd rather take control of your finances with a proven system that provides real-time information as you go, then the Money Max Account could be just the solution you're looking for.

To get started on your journey to debt freedom, complete the form at the bottom of this page to connect with one of our financial experts. They'll get in touch with you to set up your free consultation, where you'll learn exactly how the Money Max Account can help you pay off all your debts—including your mortgage—in as little as 7-10 years.