The Worst Ways to Pay Off Your Debt

Is there ever a bad way to get rid of your debt? (Spoiler alert: Yes!) That’s why I’m talking about the five worst ways to pay off debt that you’ll want to avoid.

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[ChrisCaledon]

As a Canadian, I stopped using Amazon; stopped shopping online; only buy what I need. Just paid off mortgage; went on vacation to Dominican Republic; and am super focused!

[MNLOutdoor]

I had a truck payment & I needed a new roof on my house that would be covered by insurance. The insurance company said they couldn’t pay the whole amount so I pulled a home equity loan. I ended up not having to pay for the roof so I took the home equity loan to pay off the truck because I couldn’t afford both & the truck loan was bigger. 2 years later I decided that a 15 year loan against my home to keep a truck was crazy. I sold the truck to pay off the home equity loan & now I’m saving up to buy a truck without a loan.

[neuideas]

The worst way to pay off debt is to burn out quickly and give up. Any debt repayment strategy needs to be adhered to for it to have any chance of working at all.

[carrieberrykix]

The debt snowball is so key. I still remember the feeling of paying off those small loans first. It becomes like a game of trying not to spend on unnecessary things because you want to be able to knock out another small loan the next month. By the time you get to your big debts you've built up your muscles and even though you know you're not gonna have that feeling of paying it off in full for a long time, you are able to stay the course. Paying off my debt was such an amazing journey and I learned so much about patience. I will never forget those couple of years and the perseverance it took.

[SuperAnnoyingPika]

I tried the debt avalanche and got no where because it only led to getting frustrated and giving up. I only got out of debt with the debt snowball ❤❤❤❤

[StephanieG.Augustus]

More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.

[MGRSD]

I started off using the Avalanche method, and I found it incredibly gratifying, especially when I realized it took several months to pay off one of my cards which was 6k. That sense of accomplishment told me, "If I can do that, there's nothing I can't do." If you're determined and focused enough, the Avalanche method is just as effective as the Snowball.

[topsykretts]

Debt snowball method is mathematically faster and more effective when you include probability of completion. Likelihood of paying off debt is significantly higher with the snowball method because it involves quick wins and change of human behavior.

[NaNslx]

Personal loan with a lower interest rate and manageable minimum ppayments can also really set you on the correct path with some breathing room. Of course, behavior change along with it to never get into debt ever again.

[JettaJWalls]

60% of U.S. households live paycheck to paycheck, with $19T in debt and rising delinquencies. With $800K saved, I worry about surviving retirement.

[TizhaBzdatfreak]

Avalanche works for me, snowball just made me feel like: great I paid this off… but I still have these large debts with interest… the interest drove me crazy 😂 but whatever works for one may not work for another 🤷🏾‍♀️

[SheWalrus]

personally, I feel like giving can look like different things - when needed giving can look like time instead of money when needed.

[ColinMcEvoy]

I slightly disagree with moving debt around, I used a 21 month 0% card to transfer 10k worth of debt. Even with the initial fee, was either 3 or $500, I did the math and i made enough large monthly payments to pay it off well before the 21 months saving me tons in interest whereas if I had just kept that debt on the original card that had 15-16% at the time I would have paid way more interest over the same period of time. As long as the debt is paid off within the 18 or 21 month interest fee period I don’t see an issue with it.

My last debt is a truck loan that will be getting sold soon and be debt free.

[the_algorithm]

I understood Debt Snowball to be
Lowest debt $30 mo (hypothetical) Pay an extra (what you can afford for this example $20)
ONCE PAID OFF add the $50 you were paying to the next lowest debt

Your overall income does not change (well -$20 in this case)
but you "snowball" to payments into each-other and literally all of a sudden you are paying 400-1000 mo on the final debt
without hurting your current situation

I'm doing this and I will be debt free in 17 months (20 months total)

[HyliasChosenOne]

I was laid off by an employer once, had a decent 401K and closed it out and paid off debt I had to prevent myself from getting stuck in a hole during my lapse of work.

[WarmSunMgm]

For me paying off debts that were affecting my credit score first was the most helpful. My credit score being low was making everything in my life more expensive. If i needed to move i had to pay a higher deposit. My car insurance was higher. When i got in my first car accident i had a 5% auto loan and then for my new car got a 17% auto loan despite not having any late payments. But my credit utilization made me high risk. And with everything getting more expensive it was harder to actually pay down debt. So i didn’t avalanche or snowball until i was able to clean up my credit by targeting my credit cards first then going into my smaller debts like medical.

[QoraxAudio]

Getting a personal loan with lower interest rates to pay off higher interest rates can be a way to start. As long as people don't mistake it for a solution, but just a way to start, it can actually be a good thing. It reduces the amount of debt one accrues through interest while paying it off. While it's not a solution at all, it can speed up the process.

[edstraight]

Great video, as always! People want to discount the emotional lift that utilizing the debt snowball will bring. Mathematically, yes, the avalanche saves interest. Most of us need the emotional component to make needed changes in our debt usage. Do what works for you.

[arelymedrano]

When I was in the worst of my debt I tried both . Giving and not giving and I saw the difference. When I wasn’t giving, it was harder to pay off my debt, things were coming up unexpectedly but when I was giving …things were moving smoothly… you don’t have to give large amounts of money, start with small things . You don’t have to give it to church you can give it to someone that is in need. From my experience, giving works miracles ❤

[Crazythoughtsyoushoudlknow]

I took a personal loan and now I’m out of debt faster. It’s a good option to be honest depending on rates tho