Tips for wiping out debt

Roberta Perry wanted to keep a family tradition. Her dad paid off his mortgage a few years early and always told her to pay off high-interest loans first. His example and advice stayed in her head. She and husband Ross paid off their 30-year fixed mortgage in 2019, shaving at least eight years off the loan.

Wiping out any significant debt, be it a mortgage, crippling credit card or medical debt is a monumental achievement that paves the way for a brighter financial future while providing peace of mind, financial experts say.

The Perrys are in a place others would love to be. Debt is a four-letter word for many these days, with consumer debt at a record high. Total household debt was $18.04 trillion in the fourth quarter of 2024, — according to the Federal Reserve Bank of New York. A recent Experian survey found that 1 in 4 adults has unmanageable debt.

To pay it off, consider the following two options:

With the “avalanche method” you “pay off the highest interest debt first,” said Mark Kravietz, managing partner and founder of Aline Wealth in Melville. Then move on to the next-highest interest rate debt.

Also consider the “snowball method,” where you pay off the smallest of your loans as fast as you can. Once you nix that debt, take the money you were putting toward that payment and roll it onto the next-smallest debt. Repeat until all accounts are history.

Here’s how the Perrys did it:
They bought their four-bedroom, three-bathroom Plainview home for $250,000 in 1993. They refinanced in 2002 to fund an extension and again in 2011, when they were able to get a 3% interest rate. The original mortgage at 8% had monthly payments of about $1,300, but with the refi in 2011, they dropped to $750. The Perrys have three children, and in 2013, when there was a big gap between when one son graduated from college and when their daughter would start college, they got the idea to use the amount of money they had been putting toward college expenses to instead double mortgage payments to $1,500. Those extra payments paid off.

“The noose is off our necks,” said Perry, who is excitedly planning a 40th wedding anniversary trip to Japan.