Hi Reader!

My favorite way to enjoy snowy weather is with a big mug of hot chocolate next to a crackling fire. But did you know the snow can also help you pay off your debt?

Debt can feel like being buried under a mountain of snow. Thankfully, three strategies can help you dig your way out—the Avalanche, the Snowball, and the Yeti.

Avalanche
​This method focuses on the debt with the highest interest rate first. Once that debt is paid off, the money you were using to pay it gets rolled into the next highest-rate loan. With each debt eliminated, the amount you can put toward the next one grows—like a building avalanche. By paying off the highest interest rates first, you’ll pay the least in fees overall.

Snowball
​This method focuses on the debt with the smallest balance first. Once it’s gone, you move on to the next smallest, and so on. While you may pay a little more in interest, you get the motivational boost of quick wins. Paying off smaller debts faster helps you build momentum and makes it easier to stick with the plan.

Yeti
​This method focuses on the debt that causes the most trouble. Do you have debt that makes you nervous or angry? Maybe it's a debt to a family member that is causing heartache, or debt for something you don’t want to be reminded of. Take care of the painful debt first and get it off your plate. You will have a clearer head and a lighter heart to take on the next one. Once it’s gone, go back to either of the methods above.

No matter which method you choose, remember to:

• Always pay the minimum on all debts.
• Focus extra payments on one debt at a time.
• Roll the freed-up payment into the next debt once each is paid off.

Start here: Make a list of all your debts—both loans and credit cards. Write down the full balance, the minimum payment, and the interest rate for each. Then decide which strategy feels right for you and pick the loan you’ll focus on first.

If you want help building your debt pay-off plan, schedule a FREE Penny for Your Thoughts Q&A Call​

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Remember, small change adds up. Step by step and penny by penny, we’re building a better life. Have a shiny day!

Laura