The good news is that you can’t choose a wrong plan because both the Avalanche and the Snowball Approach work for different reasons.
“Mathematically, the avalanche system is going to save you more money,” says Walton. “But if you're someone who needs an immediate hit of success, then the snowball system is better for that feeling of quickly paying off some smaller balances.”
WORK WITH CREDITORS
Contact your creditors directly and ask them to lower your rates. It’s a step people often skip, but it can make a big difference in how soon you’ll be debt-free.
RECRUIT A MONEY BUDDY
The people around you are some of the best tools you can utilize. Choose a friend or family member who knows your payoff goals and will check in on your progress. If you have a significant other, you can be each other’s money buddy, but it’s still a good idea to have someone on the outside looking in and offering extra support.
Get creative and find ways to reward yourself that stretch beyond your normal routine. It’s OK to splurge a little bit, as long as it doesn’t undo the progress you have made. Give yourself permission to enjoy your success. You deserve it!
As always, we’ve got your back. — The On Your Own Team
[Laura Walton is an Accredited Financial Counselor® and the Executive Director of TCI Foundation, a privately funded nonprofit created to give people no-cost, unbiased financial education and one-on-one advising through its College of Personal Finance and Financial Stewardship Program.]