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  • Wendell Brock

Avalanche Your Debt

A new epidemic is spreading across our country, fueled by inflation, credit cards, and “buy now pay later” options for almost all online purchases. This seemingly  invisible epidemic is spreading at an alarming rate. Have you guessed it? Consumer debt.

Our country is racked with debt. So far, in 2024, the average personal debt increased from $21,800 to $22,713. About 13% of that comes from auto loans, but over 28% comes from credit card debt. Only about 23% of American’s are debt free, and about 65% of American’s say they are living paycheck to paycheck, an increase from last year which was about 58% of Americans. It’s becoming more important than ever to pay off debt and stay out of debt.

When tackling your debt you need to have a plan. There are many strategies for paying down debt; one of the more popular methods is the avalanche method. With this strategy, you focus on paying off the debt with the highest interest rate first, while making minimum payments on all other debts. Unlike the snowball method, which focuses on paying off the smallest debt first and working your way up through your debt with increased payments, the avalanche method aims to minimize the overall interest you pay overtime, resulting in significant savings over the long term while simultaneously paying down your debts. Like the snowball method, once you pay off a debt, that payment is then applied to the next debt in line.

For an example: if you have three debts- a credit card balance with a 15% interest rate, an auto loan with a 6% interest rate, and a personal loan with a 4% interest rate, you would prioritize the credit card debt first and aggressively pay it down first. Once paid off, you would move on to the auto loan, then the personal loan, following the order of the interest rates.

A downside with the avalanche method is it can take more time to see results, especially if your highest interest rate debt is substantial. This can be  discouraging. If you are the type of person that needs to see immediate results to stay motivated, it may be more advantageous to use the snowball method or some other method of paying down debt.

The avalanche method provides a way to organize and prioritize debts while saving you money in the long run. It can empower individuals to take control of their finances. However you choose to manage and eliminate your debt, the critical thing is to start and do. Take the time to go over your budget, list all your debts, and decide what method will work best for you and your situation. Overcoming debt will help your own personal economy flourish, which will then help   bolster your own community, helping bit by bit to overcome the debt epidemic. 



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