December 30, 2020 by Lisa Brammer
It’s that time of year when spending can get out of control. But that’s not the only reason people get into financial trouble. There are lots of reasons and some of them, like medical bills or a broken down car, are beyond your control.
If you find yourself in a financial predicament there are a couple of debt-reducing approaches you might want to try.
The first method is called the Snowball. With this plan you make the minimum payment on all of your debts except the one with the smallest balance. This one you pay back as aggressively as possible. Then when it is paid off, you move on to the next lowest balance debt. This method might not be the one that saves you the most money in the long run, but since you are able to quickly resolve those lower balance debts and put them behind you, it can be a real motivator. Like dieting or exercise the one that works the best is the one you actually stick with.
The second method is called the Avalanche. This technique, like the snowball, has you making the minimum payment on all of your debts except one. But with the avalanche you pay the bill with the highest interest rate as aggressively as possible. Unlike the snowball method you may not see results as quickly, but in a long run, you will probably be saving more money on interest payments.
Whatever strategy you chose the important thing is to stick to it. Pick the one that works for you and before you know it will be breathing easy with your newly found financial freedom from debt.
United Credit Service, Inc. is a full service, licensed revenue cycle management and debt collection agency in Wisconsin providing effective, customized one on one management and recovery solutions for our business partners. Visit our website at http://www.unitedcreditservice.com, call 877-723-2902, or check out our YouTube video.
image provided by: Flickr: FF137