This article I ran across this morning is BRILLIANT! The title is Pay Your F#$%ing Debt; but, to sum it up in one sentence, the author states: “Interest is a stupid tax added to your loan balance every time you make the wrong decision with your money .“
This concept is best illustrated with the following example:
If you owe $20,000 at 5% interest and your minimum monthly payment is $150, it will take you almost 17 years to eliminate your debt and you’ll pay $12,125 in interest.
Increase your monthly payments by a mere $50, and not only will you be debt free 6 years earlier (yes, SIX YEARS), you’ll have spared yourself $2,710 in interest.
It always amazes me how people don’t get the simple concepts like this and consciously choose to tackle lower-interest debt first, when really the MATH shows this is not the best financial approach. You can read more of the article at Money After Graduation.