I paid off £98.6k of debt using the ‘Snowball’ & ‘Avalanche’ methods…it’s so easy to do if you get desperate like I was | The Sun
A WOMAN has revealed she and her husband paid off more than £98,000 of debt as she shared two strategies you must know about if you want to become debt-free.
Jenny Park (@mohaewithjennypark) took to TikTok to share her advice for those looking to pay off debts, so if you need to get your spending on track, here are two strategies that you’ll need to take notes on.
She shared her video to the social media app with the caption ‘TWO STRATEGIES TO HELP YOU PAY OFF DEBT.’
Jenny said: “Two years ago, my husband and I became debt free.
“We paid off $120,000 [£98,716] in debt. Majority of it was student loans. There were some credit card, as well as car loans.
“I wanted to share tips that were helpful for me in my debt free journey, in case it's helpful for you as well.
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“There are two schools of thought when it comes to how you approach paying off your debt.
“There is the snowball method, and then the avalanche method.
“The avalanche method is where you add up all of your different debt that you have, so let's say you have three different credit card payments or a car loan, student loan, whatever it is, you line them up based on the interest rate for that debt and the idea is that you pay off the highest interest rate first and any additional income that you have, that you can throw at your debt, aside from the minimum payments, that you attack the highest interest rate first.
“This one is the most logical, in the sense that you want to owe less money from an interest rate perspective, and then you go down that way."
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Jenny went on to explain her preferred technique, which she called the snowball method.
She continued: “The snowball method is different, and that's actually the method that I use, that my husband and I use, because it just made more sense for us, and where we were in our journey.
“So the snowball method is where you add them all up, but you list them based on the smallest amount that you owe to the highest amount that you owe.
“So let's say in this scenario, you have a credit card where you have maybe a $1,000 left in debt, you have a credit card where you have $6,000 in debt, and then a car loan where you have $10,000 in debt.
“You ignore the interest rate in this scenario, and you pay off the lowest amount of debt that you own.
“The idea here is about gaining momentum, and so that you see more progress, and you pay off these things quicker and you snowball the money that you have, so you pay off that small amount of debt, into the next amount, if that makes sense.
“The reason why I opted for the snowball method over the avalanche method, was that I tried the avalanche method and for me, what I learned is that money was just so deeply psychological, and because I didn't have the best relationship with money at the time, it was really motivating to see progress and momentum, and to see one credit card gone, one credit card gone, and make me feel a little bit more committed in my journey.
“It took about a little bit less than three years to pay off all of our debt, and so for that long haul, having that momentum was really helpful for me.”
Jenny’s video has clearly impressed many, as it has quickly amassed 127.3k views.
It has 5,826 likes, 52 comments and 353 shares.
Many social media users were thankful to Jenny for sharing her advice on how to pay off debt, which lots of people expressed in the comments.
One person said: “This is a great video and has reassured me that I'm doing it the right way! I need to see balances gone to know I've achieved my goal.”
Another added: “This made me more open to the snowball method! I have several loans to pay back too.”
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A third commented: “This has made so much sense. Thank you.”
Whilst someone else noted: “Thank you for explaining this!!!! Sooooo helpful.”
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