Essays From A Moron-Eliminating Debt

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When it comes to eliminating debt there are Several ways to approach the situation. Two of the more common . ,.are “snowball” and “avalanche” methods.

1. Snowball·

Create a list of all debts. This list is prioritized from smallest amount to largest. You make minimum payments on all. All available funds go towards that first, smallest gets paid off first regardless of the interest rate charged.  Once the first item is eliminated, you move to the second item and so on.

2. Avalanche

Create a list of all debts. This list is prioritized from highest interest rate to lowest.  Here the minimum payment on each debt is made, but all remaining funds go towards repaying the debt with the highest interest rate. Like with the snowball method, once the first item is completely paid off, you tackle the next item. This process continues until all the debts are paid off. The benefits of the snowball method are primarily psychological; when you eliminate that first debt, regardless of how small; you see progress.  There is a sense of accomplishment. This approach works for those that need a quick “win” to stay motivated. I am a proponent of utilizing the avalanche method because it saves both time and money, making it the more logical way to pay off your debts.Whatever method you choose, stay the course.  Eliminating debt is one of the pillars of financial freedom. You can now start the next phase-saving for retirement. Getting started is much easier than many think.es to eliminating debt there are Several ways to approach the situation. Two of the more common are “snowball” and “avalanche” methods.

1. Snowball·

Create a list of all debts. This list is prioritized from smallest amount to largest. You make minimum payments on all. All available funds go towards that first, smallest gets paid off first regardless of the interest rate charged.  Once the first item is eliminated, you move to the second item and so on.

2. Avalanche

Create a list of all debts. This list is prioritized from highest interest rate to lowest.  Here the minimum payment on each debt is made, but all remaining funds go towards repaying the debt with the highest interest rate. Like with the snowball method, once the first item is completely paid off, you tackle the next item. This process continues until all the debts are paid off.  The benefits of the snowball method are primarily psychological; when you eliminate that first debt, regardless of how small; you see progress.  There is a sense of accomplishment. This approach works for those that need a quick “win” to stay motivated. I am a proponent of utilizing the avalanche method because it saves both time and money, making it the more logical way to pay off your debts.Whatever method you choose, stay the course.

 Eliminating debt is one of the pillars of financial freedom. You can now start the next phase-saving for retirement. Getting started is much easier than many think.

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