I’ve done the debt snowball approach to pay off debt before and had great success with it. The debt snowball has you list all your debts from the smallest to the largest amount. You then work on paying off the smallest amount and do the minimums or close to the minimum on the other debt. As you pay off one credit card you then apply the money that you were using for that to the next smallest debt. I had success with this approach because I saw the progress. Once I paid off one credit card it was easier to pay off additional credit cards.
The best approach for me because I am not credit card person was to pay off the credit cards and close the account, but that does have a negative effect on your credit score. Below I’ve listed my debts:
- Credit Card 1 $6,858.26
- Credit Card 2 $4,991.90
- Credit Card 3 $2,879.81
- Credit Card 4 $793
- Credit Card 5 $504
- Personal Loan $500
When I write these numbers out and I stopped to think about the amount of debt that I’ve just been carrying over and carrying over it’s embarrassing. What’s worse is thinking about the interest paid especially on my student loans.
I have an app my phone that shows me an overview of my money and my net worth and with my student loans it’s well over negative $50,000. In addition to my consumer debt I am $43,998 in student loan debt, excuse me I just checked it’s gone up to $44,043.73. I updated the payment amount to make sure I’m covering the interest.
I encourage you to look into debt, repayment options, especially when it comes to your student! I am a part of the Public Service Loan Forgiveness (PSLF), I encourage you to look into this program and stay up-to-date and on top of your qualified monthly payments. This program allows your loans to be forgiven after 120 qualified payments with a qualified employer. I’m not an expert on the plan so I encourage you to look into it!
Under the PSLF program I have 67 additional payments to make and should be done by 2030. I strongly encourage you to stay on top of these documents and constantly review the payments you’ve made in your employer history. After reviewing the documents, I noticed that I personally had two years of payment history missing. I will provide an update on the process of adding the additional years!
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