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Experts say it’s possible for you to absolutely do it as long as you use a multifaceted approach.
Below, experts share theirkey strategies to go about it.
Prioritize High-Interest Debt
The first step is to tackle high-interest debts aggressively, said Salahi.
By focusing on these, he said you earn a guaranteed return equal to the interest rate you avoid.
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Leverage Debt Consolidation Wisely
Debt consolidation can be a powerful tool when used correctly.
However, he warned that avoiding the common pitfall of racking up new debts after consolidation is crucial.
Through strategic consolidation, Ive seen clients reduce their total interest payments by up to 40%.
Salahi recommended aiming for three to six months worth of living expenses.
This buffer prevents you from accumulating new debt when unexpected expenses arise.
Invest Strategically
Dont put all your eggs in the debt-repayment basket.
At a minimum, contribute enough to get the full match its free money.
Beyond that, consider low-cost index funds for long-term wealth building.
List your debts from highest to lowest interest rate.
Pay the minimum on all debts, but put any extra money toward the highest-interest debt.
Once thats paid off, move to the next-highest.
This method minimizes the total interest paid and can shorten your debt-free timeline significantly, Salahi said.
Ive seen clients save up to 20% on total interest payments using this method compared to other approaches.
Then, dedicate a large portion of this extra income to debt repayment.
Tame Impulse Spending
Dont overlook how small unplanned purchases can drain your monthly budget, Woroch said.
Why work harder to afford frivolous purchases when you’re free to simply cut back on unnecessary spending?
Practice Mindful Spending
Develop a budget that aligns with your financial goals, Salahi emphasized.
Regularly Reassess and Adjust
Your financial situation and goals will evolve, Salahi said.
Schedule quarterly financial check-ins to reassess your progress and adjust your strategy as needed.
This habit helps ensure you always optimize your approach based on current circumstances.
By implementing these strategies, it’s possible for you to work toward becoming debt-free while simultaneously building wealth.
Its not about choosing between the two but finding the right balance for your unique financial situation.
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