Carrying debt imposes significant emotional and financial stress, necessitating effective repayment strategies. The article outlines two methods: the snowball method, which prioritizes the elimination of smaller debts first to provide psychological motivation, and the avalanche method, which targets higher interest debts to save on overall financial costs. Each method has its merits, and the choice may depend on personal preferences and financial situations. With an increasing number of Americans in debt, particularly via credit cards, understanding these methods is crucial for achieving long-term financial goals like retirement.
The debt snowball method allows you to tackle your smallest debts first, promoting a sense of accomplishment as you eliminate them and motivating you to continue.
In contrast, the avalanche method targets debts with the highest interest rates first, ultimately saving more money on interest payments, but may feel less rewarding at first.
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