I often get asked what is the best way to pay down your debt. Here’s the spoiler: the method that actually works for you is the best way to slay that debt. Personally, I am a weirdo who loves numbers and gets totally motivated by the math behind building wealth and ditching debt. Even though I’ve never carried debt before, I will be marrying into student loan debt later this year when Peach and I finally tie the knot. Naturally, we’ve discussed how to handle paying off his student loans many times over the years and our plan of attack has evolved as our jobs changed and incomes increased. But one thing remained consistent: we wanted to knock out his higher interest rate student loans first (aka debt avalanche).
Currently, Peach has been putting the extra money he earns from coaching and grading state tests (he’s a teacher) towards his student loan with the highest interest rate. Once we’re married, we’ll be using some of my income to also ditch that debt quickly. While it does certainly take a bit longer to see movement when you’re paying down higher interest rate debt, we’re both able to feel motivated about the idea of saving more in the long-run. However, I recognize this as pretty unusual. Generally, those small wins in the beginning of your debt repayment journey can really help motivate you to keep going. This is why debt snowball is often the superior method for most folks.
But you should choose for yourself! Learn more about how to snowball or avalanche your debt in this week’s installment of The 3-Minute Guide.