{"id":3364,"date":"2019-10-17T21:46:01","date_gmt":"2019-10-17T21:46:01","guid":{"rendered":"https:\/\/sites.austincc.edu\/money\/?p=3364"},"modified":"2019-10-17T21:46:01","modified_gmt":"2019-10-17T21:46:01","slug":"two-approaches-to-paying-down-your-debt","status":"publish","type":"post","link":"https:\/\/students.austincc.edu\/money\/smmo-blog\/two-approaches-to-paying-down-your-debt\/","title":{"rendered":"Two Approaches to Paying Down Your Debt"},"content":{"rendered":"

Dave Ramsey once said, \u201cDebt is dumb\u201d and it has a choke hold on so many of our friends and family. In the Peer Money Mentor Program, we\u2019re learning strategies on how to minimize and pay down consumer debt. Credit card debt is one of the most common forms of consumer debt. Think about this, companies like Forever 21, DSW, and GameStop are getting in on the credit game targeting consumers with store-specific rewards programs because they want to get paid too. According to Nerdwallet.com, the average household credit card debt is of $15,482.\u00a0 That\u2019s a lot of dough owed and interest that will be paid just on credit cards, not to mention student loans, auto loans, and medical debt. So Lisa and I want to share some methods to help you with reducing your debt. They both are two very different approaches so check them out and see which one fits you the best.\u00a0\u00a0<\/span><\/p>\n

Krishna\u2019s Method:<\/b>\u00a0 My method is called the \u201c<\/span>Debt Snowball<\/span><\/a>\u201d by Dave Ramsey and it consists of paying off your smallest debts first and once one is paid off, using the capital of that debt to go towards the next big one and so on.\u00a0 I started with paying a small medical bill of $300 and haggled with the company until I got it reduced to $200 and paid it off on the spot. The satisfaction was immense to know that I had one less debt and it allowed me to stay motivated to set up a payment plan for the next big one which was around $1,500.\u00a0 That is the point of the snowball method, small victories helps with the psychological motivation to keep going.\u00a0 I have managed to pay off 3 delinquent accounts this way, and am still set up on a payment plan for one more. I am also keeping on top of my current bills so that way I don\u2019t have to do this again but at this rate I should be able to finish off my degree debt free!<\/span><\/p>\n

Lisa\u2019s Method:<\/b>\u00a0 Managing debt for me is like pulling a splinter from my foot.\u00a0 Painful but relieving once I removed it. I was able to utilize the Dave Ramsey \u201c<\/span>Debt Avalanche<\/span><\/a>\u201d approach to manage my debt.\u00a0 This method is not for everyone, you pay the minimum on all accounts and use any excess funds to pay off the highest interest account. Knocking one account at a time and saving money from all of the high interest you would have paid.\u00a0 This takes discipline and determination, so you have to be clear on who you owe, how much you owe, the interest rates, and due dates. The debt snowball isn\u2019t for everyone, but it\u2019s the most logical choice for me.\u00a0<\/span><\/p>\n

Mathematically, the debt avalanche makes more since while the debt snowball gives you small wins.<\/p>\n

If you need help with strategies in paying down debt, you can reach out to ACC\u2019s Student Money Management Office by going to their website at\u00a0 austincc.edu\/money to request a financial coach. Meeting with a financial coach helped us see the bigger picture.\u00a0 In the end we were able to clear up accounts and now we\u2019re living almost debt free.<\/span><\/p>\n

We all have different ways in how we like to tackle things, either a little at a time or just get it done and out of the way.\u00a0 The particular method you use does not matter, what matters is that you get your debt under control. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Dave Ramsey once said, \u201cDebt is dumb\u201d and it has a choke hold on so many of our friends and family. In the Peer Money Mentor Program, we\u2019re learning strategies on how to minimize and … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":88,"featured_media":3365,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[58,60],"class_list":["post-3364","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smmo-blog","tag-krishna-sauceda","tag-lisa-medina"],"_links":{"self":[{"href":"https:\/\/students.austincc.edu\/money\/wp-json\/wp\/v2\/posts\/3364","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/students.austincc.edu\/money\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/students.austincc.edu\/money\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/students.austincc.edu\/money\/wp-json\/wp\/v2\/users\/88"}],"replies":[{"embeddable":true,"href":"https:\/\/students.austincc.edu\/money\/wp-json\/wp\/v2\/comments?post=3364"}],"version-history":[{"count":0,"href":"https:\/\/students.austincc.edu\/money\/wp-json\/wp\/v2\/posts\/3364\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/students.austincc.edu\/money\/wp-json\/wp\/v2\/media\/3365"}],"wp:attachment":[{"href":"https:\/\/students.austincc.edu\/money\/wp-json\/wp\/v2\/media?parent=3364"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/students.austincc.edu\/money\/wp-json\/wp\/v2\/categories?post=3364"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/students.austincc.edu\/money\/wp-json\/wp\/v2\/tags?post=3364"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}