When paying down debt, it is best to___

Question

a) pay as much as possible toward the debt at the beginning of the month
b) pay as much as possible toward the debt at the end of the month
c) pay part toward the debt and part toward a savings account at the beginning of the month
d) pay part toward the debt and part towad a savings account at the end of the month.

Answer 1

When paying down debt, it is generally best to:

a) pay as much as possible toward the debt at the beginning of the month.

Paying as much as you can at the beginning of the month takes advantage of any potential interest savings, especially if the debt accrues interest daily. Additionally, if you can allocate funds toward your debt early, you can reduce your overall balance sooner, which can lead to less interest accumulated over time. However, it's also important to ensure that you have enough funds set aside for necessary expenses throughout the month.