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Two Ways To Pay Down Your Debt And Skyrocket Your Finances
Snowball vs Avalanche
Which one have you used?
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Snowball vs Avalanche
Which one have you used?
/THREAD/
1. Avalanche Method
This strategy, also known as debt stacking, focuses on paying off your debts starting from the highest interest rate to the lowest
Make the minimum payment on all of your accounts
This strategy, also known as debt stacking, focuses on paying off your debts starting from the highest interest rate to the lowest
Make the minimum payment on all of your accounts
Then pay as much as possible toward the debt account with the highest interest rate
Once paid off, put the extra money to the second-highest interest debt account
By tackling your debts in order of interest rate, you’ll end up paying less overall and get out of debt faster
Once paid off, put the extra money to the second-highest interest debt account
By tackling your debts in order of interest rate, you’ll end up paying less overall and get out of debt faster
2. Snowball Method
This strategy focuses on sorting all your debt amounts from the smallest to the largest
Then, you start by paying down the smallest ones, which are the ones to be paid off faster
This strategy focuses on sorting all your debt amounts from the smallest to the largest
Then, you start by paying down the smallest ones, which are the ones to be paid off faster
Make the minimum payments required for each debt account
Then add as much as you can afford to the accounts with the lowest balance
This creates a snowball effect, creating momentum for you to start paying off your debt
Then add as much as you can afford to the accounts with the lowest balance
This creates a snowball effect, creating momentum for you to start paying off your debt
You may end up paying more overall compared to the avalanche method, due to the interest of each debt account.
However, this may create a positive psychological effect on you to start paying off your debt.
However, this may create a positive psychological effect on you to start paying off your debt.
As with everything in personal finance, you need to find the option that suits you best
Paying down debt is a crucial step in your journey towards financial freedom
Get started and watch your finances skyrocket
/END/
Paying down debt is a crucial step in your journey towards financial freedom
Get started and watch your finances skyrocket
/END/
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