Thread by @itsKostasOnFIRE

Two Ways To Pay Down Your Debt And Skyrocket Your Finances

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

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

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

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

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.

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/

If you liked this thread click below and retweet the first tweet, and follow me to stay updated

https://twitter.com/itsKostasOnFIRE/status/1388500259920400384?s=19

Check below my master thread with all my threads on

• Finance
• Investing
• Stock market history

https://twitter.com/itsKostasOnFIRE/status/1345790210441928708?s=20