What is the best way to pay down debt? Americans are in tremendous amounts of debt (think over 400 billion on just credit cards alone)! Not only is this debt keeping folks from reaching their financial goals, but it’s also taking a toll on the mental health of borrowers. Knowing the best strategy to get out of this debt is a big deal and could be the difference between living paycheck to paycheck or achieving financial freedom. Listen as we cover both approaches so you can decide which is better for you: the debt snowball (popularized by Dave Ramsey) and the debt avalanche (also known as debt stacking).
If you’ve identified the approach that should work for you but you’re not getting anywhere, then be sure to check out the National Foundation for Credit Counseling, or NFCC for additional help. It’s always great to have an additional set of eyes on your situation to help you create a plan to pay down your debt.
However, even after giving it your all and focusing like crazy, you may not have even put a dent in your debt levels if your interest rates are really high- that’s when a refinance might be a good option for you. If that’s the case, then be sure to check out Credible or SoFi where you can easily compare the best loan options that are available to you.
During this episode we enjoyed a Maple Vanilla Copra Kai by Southern Grist Brewing which you can find on Untappd. Another big thanks to Jamie and friends up there in Nashville for donating these beers to the show! And if you enjoyed this episode, be sure to subscribe and give us a quick review in Apple Podcasts, Castbox, or wherever you get your podcasts- we’d love to hear from you.
Best friends out!
Hey Matt & Joel,
Love the show! I was listening to the most recent Debt Snowball vs Debt Avalanche episode and I thought I would give me insight on why I think the latter method has its naming convention.
As this is my preferred method of debt repayment, I pay the bare minimum for each of my loans. Once I have extra cash in my savings, whether it is from a surplus in my budget, tax refund, gift, etc, I pay off a large chunk of my debt with the largest interest rate. Thus avalanche attacking that loan. My highest rate student loan for example, has monthly payments of around $100, and then ~quarterly payments of a few thousand dollars.
Hope you guys found this helpful!
Thanks for the great podcast,
James