What is your personal debt reduction method aside the debt snowball method? - page 3.

justdimin

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Quote from: naira on June 07, 2023, 07:06:22 AM

Prioritize paying debts based on the grace period because it's useless if you prioritize smaller debts but large debts are getting closer to the limit. In my opinion, everything has to be adjusted according to the order, if the time span is the same, when you face a fairly close time, what needs to be considered is that the debt is not in quantity or quantitative.

I agree with such methods, but they are not always effective for various types of debt. We will be demanded for one full payment so that is what needs to take precedence over methods.

I think the best method to pay the debt is always figuring out the lowest amount you could pay, if you can pay a lot less towards your credit card debt, then you pay that, not the whole thing, if you can postpone your loan 3 months then you postpone it, always pay as little as possible and never try to pay all of your debt.

Because inflation is reality and you would be able to make more money in the future, not too many people make less money next year compared to this year, almost everyone will make more, that's the traditional trajectory for working, you make more every year. I do, I make more every year due to inflation in my country, and I have A LOT of debt compared to last year, I have more debt than my entire salary compared to last year, but this year? My salary is a lot more due to rates and inflations so my debt is only half of my income not all of it.

wxa7115

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Quote from: Bananington on June 04, 2023, 05:35:35 AM

Quote from: wxa7115 on June 04, 2023, 01:25:42 AM

that being said nothing beats never getting in debt to begin with, as with the exception of big purchases like a house or a medical emergency there is not really any justification to accumulate so much debt.

Best way to deal with debts is to avoid debts. I know that debt can be sometimes unavoidable, but it's probably planning you can get things done. If you are getting in that it should be for a very reasonable for purpose and you should already have a plan on how to pay back the debt without it becoming a burden for you. If you become used to getting in debts very easily, over unnecessary things, it can be a consuming habit that will take a lot of discipline to overcome. With a habit of getting in debt, you will be exhausting any money you expect even become it gets to you.

And the saddest part of all is that consumers get in debt in order to purchase what they want, but what they do not realize is that by buying most of their stuff on credit they overpay for such products several times over.

If instead they decided to save their money for every purchase they wanted to make and they bought those products with cash, then they will get more products with the same amount of money by just knowing how to use their money properly.

el kaka22

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Just small grind basically. Do not rush to finish it, try to make it as long as possible, it is better to pay 100 dollars for 120 months than 1000 dollars for 12 months, that is how you should be approaching it. Sure there could be interest changes between the two that's true but I would say even if you talk about paying 5 dollars more, which is a lot of interest change on 120 months, it would still be better and I would still do that.

Because by the time that 120 month one is over, 100 dollars will worth a lot less, without question, the devaluation of dollar is here and it is not going away. Just do small per month debts and that way you are going to be doing a lot better, I do that, I have a ton of debt, a million things I bought, all small by small and for long term.

passwordnow

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Quote from: xSkylarx on June 07, 2023, 08:39:34 PM

Quote from: passwordnow on June 07, 2023, 08:29:53 PM

The trick is very simple that is I am applying to myself. If I cannot afford it, there is no other option but to buy those things that I want in cash. Not gonna get any borrowed money or even gonna take a loan. That's the first simple rule that's working for me and I am sure that others are also using this as a rule to themselves, simply don't take it if you cannot afford it. In short, do not borrow if you're planning to go for it, and for those that have debt and having a hard time dealing with it. First, don't add another debt and as much as you can, have more cash flow.

This is really the best thing to do, but again, for others, it is not possible as they need to take a loan twice for something. If you are having a family and the income is not that huge and you need to pay something like tuition or needed stuff in your home, you are forced to take a loan. Also, as others said, if you won't take a loan, you can't purchase those things, which is sometimes true because I took a loan just to have my motorcycle as we used it for traveling, and we know right now that the fare is very expensive, and I also can't purchase it in cash. But the thing is that I can pay it on a monthly, so there are no problem with me, but I do need to pay it on time, and there are no other debts so that I can still pay it.

Yes, it's not applicable to all but I hope that someone will realize it. It's quite hard to understand if we want something to have as ours but if we really can't afford it, much better not to resort to it through taking a loan. That's gonna put you into a deeper hole of loaning because you'll discover that you can have things even if you lack money. That's why that thinking won't work on me and I'll just accept the fact that if I can't buy it through cash, then I'll have to forget it for now and save until I am able.

BitcoinTurk

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I have started to pay my debts in installments due to some financial problems I have experienced recently. When I make a profit from any transaction I switch it to cash for my debt regardless of big or small and when I get my salary I set aside money for my debt as like I was saving. Especially in the last two months I have completed almost 40% of my entire debt balance due to the use of this method and according to the plans I have made I will finish the remaining amount in the remaining 2 months.
I will definitely recommend that people with high debts use this method patiently because unfortunately it is not easy to arrange and pay the entire amount in one way or another. In addition, you can enter a vicious circle after making a payment at once.

Findingnemo

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Quote from: milewilda on June 07, 2023, 04:15:47 PM

Quote from: Findingnemo on June 07, 2023, 04:07:00 PM

The other method is debt Avalanche which is paying of your highest debt first and the next big till your lowest debt which is not that effective compared to snowball method but it may works in some cases. On a personal scale I avoid taking loans as much as possible because it can become extra pressure which makes me feel anxious about paying the dues on time every month so I will try to foreclosure the loan instead of accumulating assets if possible.

Actually which one of those two methods would really be working and this would be entirely be depending on your dedication on clearing up your debts which its actually hard if you dont persevere or really that being serious on clearing it up. I would rather be having that snowball from least to greatest when it comes on clearing up the debt which focusing on small first because on the time that you do clear up those small loans or debts then you would really be having that kind of feeling which it would be boosting up on proceeding because you do see some progress or you've been seeing that its been cleared up 1 by 1. Although this cant really be that so simple which we know that we do have other spendings or expenses along the way. Just like on what others been saying that it would really be that a challenge or something tough on making some division of your salary specially if you do have only that one income source on where allocating something for debt is really a huge cut and something that shouldn't really be there but well we do have situations in life which we do need to borrow up something and this is why it leaves us no choice but to engage with it.It isnt really wrong as long you do know on how to repay them on time.

The snowball method is the one adviced to follow by most of the economic experts because when someone caught into a debt means they are not good at managing the funds so going smaller to bigger would be ideal on the other side clearing the biggest first can save a huge money from the interest that is why it depends on what kind of debt we are having to face. Just as I said avoiding loans as much as possible is good thing for middle class because it's a trap from banks whereas if you're a millionaire you can enjoy the benefits with the debt.

Husires

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The problem of debt is the delay in repaying the first debt that will make procrastination in repaying the rest of the debts a normal matter. Therefore, if you are advising someone, I will tell him that he does not fall into the debt unless he is forced, and then he tries to pay it first. Otherwise, when you have several accumulated debts, you have put yourself in a hole from which you will not get out. almost.

Payment strategies are an advanced step after knowing the importance of payment. Personally, I prefer that you pay taxes and government procedures first, and the cumulative debts second, and then go to the rest of the debts. The snowball method may not work for everyone.

xSkylarx

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Quote from: passwordnow on June 07, 2023, 08:29:53 PM

The trick is very simple that is I am applying to myself. If I cannot afford it, there is no other option but to buy those things that I want in cash. Not gonna get any borrowed money or even gonna take a loan. That's the first simple rule that's working for me and I am sure that others are also using this as a rule to themselves, simply don't take it if you cannot afford it. In short, do not borrow if you're planning to go for it, and for those that have debt and having a hard time dealing with it. First, don't add another debt and as much as you can, have more cash flow.

This is really the best thing to do, but again, for others, it is not possible as they need to take a loan twice for something. If you are having a family and the income is not that huge and you need to pay something like tuition or needed stuff in your home, you are forced to take a loan. Also, as others said, if you won't take a loan, you can't purchase those things, which is sometimes true because I took a loan just to have my motorcycle as we used it for traveling, and we know right now that the fare is very expensive, and I also can't purchase it in cash. But the thing is that I can pay it on a monthly, so there are no problem with me, but I do need to pay it on time, and there are no other debts so that I can still pay it.

passwordnow

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The trick is very simple that is I am applying to myself. If I cannot afford it, there is no other option but to buy those things that I want in cash. Not gonna get any borrowed money or even gonna take a loan. That's the first simple rule that's working for me and I am sure that others are also using this as a rule to themselves, simply don't take it if you cannot afford it. In short, do not borrow if you're planning to go for it, and for those that have debt and having a hard time dealing with it. First, don't add another debt and as much as you can, have more cash flow.

Uruhara

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The Snowball method seems to be what many people also do in an effort to free themselves from debt and pay it off gradually until it's finished.

But the situation is different for those who have this type of debt that has interest that increases if it is not repaid immediately. then it is important to prioritize this one. after this one is done then we can pay off other debts that are not time bound. while those that are time bound are very important to take precedence because if we are not on time even our psychology can be disrupted and have an impact on decreasing our performance in making money. what is more important is that we must continue to increase our sources of income from time to time.

alastantiger

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The snowball methods works perfect for me. I have no problem or pressure whatsoever keeping or following it. I pay off my lowest debts which gives me the morale to do what it take to pay off the remaining ones. I followed it and I cleared of credit card debts and other family debts too. In addition, I got a job and like a pauper for almost 3 months, while doing the best I could to get by. I found bitcoin and my life change. It helped me accelerate paying off my debts faster. I don't want to be in debts any more. A debts free person is a happy person.

milewilda

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Quote from: Findingnemo on June 07, 2023, 04:07:00 PM

The other method is debt Avalanche which is paying of your highest debt first and the next big till your lowest debt which is not that effective compared to snowball method but it may works in some cases. On a personal scale I avoid taking loans as much as possible because it can become extra pressure which makes me feel anxious about paying the dues on time every month so I will try to foreclosure the loan instead of accumulating assets if possible.

Actually which one of those two methods would really be working and this would be entirely be depending on your dedication on clearing up your debts which its actually hard if you dont persevere or really that being serious on clearing it up. I would rather be having that snowball from least to greatest when it comes on clearing up the debt which focusing on small first because on the time that you do clear up those small loans or debts then you would really be having that kind of feeling which it would be boosting up on proceeding because you do see some progress or you've been seeing that its been cleared up 1 by 1. Although this cant really be that so simple which we know that we do have other spendings or expenses along the way. Just like on what others been saying that it would really be that a challenge or something tough on making some division of your salary specially if you do have only that one income source on where allocating something for debt is really a huge cut and something that shouldn't really be there but well we do have situations in life which we do need to borrow up something and this is why it leaves us no choice but to engage with it.It isnt really wrong as long you do know on how to repay them on time.

Findingnemo

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The other method is debt Avalanche which is paying of your highest debt first and the next big till your lowest debt which is not that effective compared to snowball method but it may works in some cases. On a personal scale I avoid taking loans as much as possible because it can become extra pressure which makes me feel anxious about paying the dues on time every month so I will try to foreclosure the loan instead of accumulating assets if possible.

tjtonmoy

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Quote from: tygeade on June 07, 2023, 06:32:42 AM

Having two paying dates were seem less pressure than only one but the only downside is that our loans, we will take time to be payed and then we think we are paying more than usual. This is hassle if we also have other expenses outside. If the loan has a single paying time, sometimes the person who took the loan can still be delayed in terms of paying it so they are still allowed to pay the loan on a another date but the only difference is that they are now required to pay some extra fees as an act of penalty.

Maybe I was unable to explain that clearly. Let me clear that for you. The "2 times" that I mentioned is not 2 paying dates. Let's just say that I am going to get paid after 15 days. I will get the next payment after another 15 days. So I will set the repay date after 30 days. If I get the payment in the first 15 days time, I will save what is necessary to pay the debt. And I will wait for the next payment and make it as my backup plan. That way, when the deadline is near, I will have double the amount than what is necessary. I will repay the debt, and also I will have a savings that I can use as I please.
Or in worst case scenarios, if the first payment date is missed, I can use the next payment to repay.
I don't know if this is something good or bad, but it has helped me a lot. And even if I have to pay a little bit extra, I won't feel the pressure that will ruin my day. I will stay more focused that way, and the debt will be paid in time too. This way it is possible to avoid the penalty fees too. I hope I was able to explain it more clearly this time.

naira

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Quote from: SamReomo on June 02, 2023, 09:26:17 AM

Quote from: mvdheuvel1983 on June 02, 2023, 08:48:50 AM

The debt snowball method is one of the most recommended strategies to get out of debt. How does it work?

For those who have gotten out of debt more quickly, did you use the debt snowball method or another personal debt payment strategy that worked for you over the years?

I must say that the debt snowball method is one of the best strategies to be debt free because it has a very good concept in repaying the debts. The main focus goes on paying the smallest debts and slowly moving towards the one with very high value. When you start following the strategy and successfully paid your smallest debt you will get positive emotions about yourself. You will now focus on paying the rest of the debt one by one over time, and you won't delay the payment of any debt on your shoulders.

Prioritize paying debts based on the grace period because it's useless if you prioritize smaller debts but large debts are getting closer to the limit. In my opinion, everything has to be adjusted according to the order, if the time span is the same, when you face a fairly close time, what needs to be considered is that the debt is not in quantity or quantitative.

I agree with such methods, but they are not always effective for various types of debt. We will be demanded for one full payment so that is what needs to take precedence over methods.

tygeade

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Quote from: tjtonmoy on June 02, 2023, 02:56:52 PM

Firstly, I am not into debt that much, but when it becomes necessary I consider following a strategy of my own. I don't know if this exists already or have a name, but this is what I came up with.
I only borrow when it's an extreme scenario where borrowing is the last option. I like to set the deadline 2 times more than my payment date. That way, even if one gets missed, I try to make sure the next pay date will bring the amount for sure. Also, I take the minimum amount that is needed for the job to be done. So less pressure there.
What you said in OP about snowball method, it was unknown to me till this day. It's a really good method that you have taught me today. Thanks to you for sharing such informative post. This is how human mind works and this method shows exactly that. Now I have 2 methods in my arsenal to use. This will be very helpful for the upcoming future.

Having two paying dates were seem less pressure than only one but the only downside is that our loans, we will take time to be payed and then we think we are paying more than usual. This is hassle if we also have other expenses outside. If the loan has a single paying time, sometimes the person who took the loan can still be delayed in terms of paying it so they are still allowed to pay the loan on a another date but the only difference is that they are now required to pay some extra fees as an act of penalty.

It's my first time as well to hear about the snowball method I thought it's about taking another loan to pay our previous loans lol because snowball seems like an aggressive word. I mostly heard it though in MOBA games.

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Quote from: mvdheuvel1983 on June 02, 2023, 08:48:50 AM

However, the debt snowball method may not be effective if you have debts with specific payment dates that, if missed, could result in higher interest rates or a negative impact on your credit score. Nobody wants any of these.

Recently, I had some debts to pay and prioritized them based on urgency, regardless of their size. I had to pay them by or before the deadline. I didn't mind whether they were big debts or small debts. What mattered was meeting up with the deadline. This approach worked for me, although I'm not sure if it falls under the debt snowball method.

For those who have gotten out of debt more quickly, did you use the debt snowball method or another personal debt payment strategy that worked for you over the years?

I agree about snowball type of method on which you would be able to sweep or clear up those debts one by one on which you would really be eager on the time that you do see that you are progressing or clearing

up those things but its really that hard on ignoring those investment installments or business related on which you cant really be able to halt them on which this would slowed up the pace but somewhat still
considerable as long you do see that progress.This is the most important thing on which you should really be that having the management if you do have credit cards.In my own way or method on clearing up
specially on my credit cards is that i do make out some installment its true that it doesnt matter whether this is big or small as long you do see that you could be able to clear up those
debts in due time but of course this would might take long.

romero121

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My choice of debt reduction is using gold as collateral. When we use gold as collateral it is possible to get loan amount at a much lesser interest than that of the personal loans or out of other loans available. It ease out to pay the amount directly to the gold loan account, which helps with the easy completion of debts than going for borrowing and other property based loan schemes.

Even if we were unable to pay the settlement amount at the mentioned time period, it is possible to pay the interest and last the time period to settle the loan.

BitcoinPanther

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Quote from: Gyfts on June 03, 2023, 07:17:51 PM

IMO the "snowball method" is complete junk. It's the reason why people are stuck in perpetual debt cycles.

Paying off high/compounding interest first is the only answer if avoidance of debt is unavailable. Interest rates/compounding interest are the reason people slip into debt. The payments become insurmountable. Factor interest rates with the total debt due, obviously. The interest rates of a 100k USD loan, while they may be lower, take priority over that of a 100 USD loan.

I also think the method you are stating is the best method in paying debt. This is called Debt Avalanche method, this will lessen our losses due to high interest of debt. In this method we prioritize the debt that has the largest interest rate. See the difference between the two methods:

Quote from: Gyfts on June 03, 2023, 07:17:51 PM

How do you define urgency? If you risk default on a particular debt which has a lesser interest rate than on another debt with a greater interest rate, would you take the debt of greater interest rate to be more urgent?

For me, it is the one that is in the nearest due and after settling that, I would prioritize the one with highest interest. Defaulting on loan can give us more problem and extra interest, so prioritizing loan that is about to due is the best decision.

Inwestour

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Quote from: Bananington on June 04, 2023, 05:35:35 AM

Best way to deal with debts is to avoid debts. I know that debt can be sometimes unavoidable, but it's probably planning you can get things done. If you are getting in that it should be for a very reasonable for purpose and you should already have a plan on how to pay back the debt without it becoming a burden for you. If you become used to getting in debts very easily, over unnecessary things, it can be a consuming habit that will take a lot of discipline to overcome. With a habit of getting in debt, you will be exhausting any money you expect even become it gets to you.

Yesterday I watched a video about a businessman who took out a loan of 500k to develop his business and he claims that if he had the opportunity, he would take an even larger loan. I don’t know if this is a different way of thinking, or something else, but just the thought that I will have to repay such a debt becomes scary for me.

I understand that debts can be bad and good, but my upbringing does not allow me to think in such categories, I am also convinced that any debts are bad. Apparently, borrowed money can help you reach your goal much faster if you know what needs to be done for this and you only lack the financial resources for this.

Topic: What is your personal debt reduction method aside the debt snowball method? - page 3. (Read 682 times)