Snowball Method vs. Avalanche Method: What’s the Best Way to Tackle Debt?

Snowball Method vs. Avalanche Method: What’s the Best Way to Tackle Debt?

Debt is the ultimate killjoy. It can destroy a budget, make long-term financial planning impossible, and shadow every purchase you make with guilt. No one wants to live with that debt burden. But how do you kiss your debt goodbye?

Crawling out from under this mountain won’t be easy, but if you’re ready to realign your priorities and do what it takes, you can shake off debt no matter how large.

Let’s take a look at two popular approaches for paying down debt and explore the pros and cons of each.

The debt snowball method

The snowball approach to getting out of debt was popularized by financial guru Dave Ramsey. It involves focusing on paying off the smallest debt first, and then working on the next-smallest debt until they’re all paid off.

Let’s take a look at how this would work using an example scenario. Say you’ve squeezed an extra $500 out of your budget to channel toward paying down debt and you have the following debts:

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Weiterlesen Snowball Method vs. Avalanche Method: What’s the Best Way to Tackle Debt?