When I was thinking abut the personal finance section of my goals and objectives for 2025 attacking debt was on my mind. Taking a look at my debt I think there is a clear hierarchy, a tiered approach ranging from short term fire to long term attackable to nice to go after but not necessary.
Tier 1 Debt
The biggest debt culprit in my life is consumer debt – credit card debt. I got behind it a bit in 2023 & 2024 and recently moved everything to two 0% accounts and set myself up with a weekly payment plan to pay off the first one before interest is due. Once that is completed, I will attack the second account.
Theoritically I could clear out cash and investments to eliminate the debt, but I have very little interest in doing so.
Tier 2 Debt
This debt includes 3 long term debt items that aren’t dire but should be taken care of eventually. They include the debt on my solar panels, debt associated with my boat and debt on my permanent life insurance policies.
It would be nice to get rid of some of this debt, but not at the expense of clearing out Tier 1 Debt, and even then, the payments would have to be balanced against the goals of my emergency fund and exposure to the market.
Tier 3 Debt
Simply put – Mortgages. Both my mortgages are at very low interest rates. Paying these off are no where near priorities.
Conclusion
Starting 1/15 and every month thereafter I will update my debt and progress (or regression) on paying it off!