Comments on: The Debt Snowball Plan http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/ Talking about money, without being boring. Sat, 05 Jul 2008 10:07:17 +0000 http://wordpress.org/?v=2.5.1 By: Student http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-49927 Student Fri, 02 May 2008 20:39:58 +0000 http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-49927 Thank's, very interesting article. Congratulations! It's a very good plan. Thank’s, very interesting article. Congratulations! It’s a very good plan.

]]> By: Janni http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-49459 Janni Tue, 29 Apr 2008 16:31:02 +0000 http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-49459 The debt-snowball method is simple, but many people dont think of it until they have someone explain it to them. The method contains only a few easy to follow steps. First, the person must list all his debts in order from smallest to largest. If two debts have a similar balance, then he should payoff the debt with the largest interest rate first. It may make more sense to pay off all the debt with the largest interest rates first, but an important factor of the debt-snowball method is the role that psychology plays. The borrower takes on a more positive attitude when he sees fewer bills every month. If the borrower has the willpower, it may be better to pay off the balances with the highest interest rates first, but this theory is not part of the debt-snowball method. The debt-snowball method is simple, but many people dont think of it until they have someone explain it to them. The method contains only a few easy to follow steps. First, the person must list all his debts in order from smallest to largest. If two debts have a similar balance, then he should payoff the debt with the largest interest rate first. It may make more sense to pay off all the debt with the largest interest rates first, but an important factor of the debt-snowball method is the role that psychology plays. The borrower takes on a more positive attitude when he sees fewer bills every month. If the borrower has the willpower, it may be better to pay off the balances with the highest interest rates first, but this theory is not part of the debt-snowball method.

]]> By: IVA http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-46371 IVA Tue, 04 Mar 2008 17:08:41 +0000 http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-46371 Good advide, The Debt Snowball Plan is for everyone who has debts. Other options may be to negotiate your debt, or make an individual Voluntary Arrangement with your creditor. We have to make an effort to avoid the debts. Good advide, The Debt Snowball Plan is for everyone who has debts. Other options may be to negotiate your debt, or make an individual Voluntary Arrangement with your creditor. We have to make an effort to avoid the debts.

]]> By: John http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-24782 John Fri, 23 Nov 2007 05:56:12 +0000 http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-24782 Seems like an another good way to get rid of the debts. Good post man, it's worth it Seems like an another good way to get rid of the debts. Good post man, it’s worth it

]]> By: ispf http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-99 ispf Sat, 13 Jan 2007 21:14:00 +0000 http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-99 Sound like a good plan. Good Luck! Sound like a good plan. Good Luck!

]]> By: Stephanie http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-100 Stephanie Sat, 13 Jan 2007 16:29:00 +0000 http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-100 ispf: Don't worry about the long comment, it just means you care about what you're writting!<br /><br />Thank you for the advice. I do hope to pay down my credit card as soon as possible, and then start creating a cushion for when I have to start paying my student loan. However, I don't see any advantage to paying <b>extra</b> into my car loan, since paying it faster won't save me any money (since there's no interest). Instead, I want to put any extra I could pay into the bank, where it can pile up for my "student loan cushion."<br /><br />I do however want to...<br /><br />Make all my payments each month<br />Pay off my credit card as fast as possible<br />Start putting aside money for my futute student loan payments<br /><br />I hope my plan settles your worries! =) If not, suggestions are always welcome. ispf: Don’t worry about the long comment, it just means you care about what you’re writting!

Thank you for the advice. I do hope to pay down my credit card as soon as possible, and then start creating a cushion for when I have to start paying my student loan. However, I don’t see any advantage to paying extra into my car loan, since paying it faster won’t save me any money (since there’s no interest). Instead, I want to put any extra I could pay into the bank, where it can pile up for my “student loan cushion.”

I do however want to…

Make all my payments each month
Pay off my credit card as fast as possible
Start putting aside money for my futute student loan payments

I hope my plan settles your worries! =) If not, suggestions are always welcome.

]]> By: ispf http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-101 ispf Sat, 13 Jan 2007 15:55:00 +0000 http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-101 Hi Stephanie,<br /><br />Congratulations, on starting to think about money and personal finances early. I just wanted to share something from my school days with you, hoping to change your mindset about debt.<br /><br />When I started my grad school, we (me and the better half) each had taken out huge education loan. But since we did not have to start paying it until we finished studying we didnt not "count" it. Next we went a bought a car. We probably could have done without it. We used some of the left overs from education loan and ALL our savings till that day, to pay for it in cash (no car payments) but it comepletely broke our bank. We didnt plan for future expenditure, and slowly started putting books and anything-beyond-the-everyday expenditure on credit cards. As we got comfortable doing this, our "lifestyle" started getting better and we just kept piling it on credit cards. When the finance charges started to catch up, we started to feel the burn. The better half got a job before me, but it was terrible to watch <b>most of the paychek vanish, to pay back loans</b> :( Its a disgusting feeling, when you finally start earning, but you cant keep the money because there are too many loans. And the interest on the loan is money you just give away, something you have never really got to use or enjoy.<br /><br />Anyway, what I am trying to say is, dont treat your student loan and car loan like they dont matter. It is still debt. It is still something you need to pay back. Its still <b>money that needs to go OUT from you</b> at some point. High interest or not, pay it off fast. Just think of it, when you finally finish school and start working, with no or very less loan, you will easily be able to say, "<b>richer</b> than you, seriously!" (you probasbly shouldnt say it out loud, though) :)<br /><br />(Whoa, long comment, sorry kinda got carried away. Don't want to see someone else make the same mistakes as me.) Hi Stephanie,

Congratulations, on starting to think about money and personal finances early. I just wanted to share something from my school days with you, hoping to change your mindset about debt.

When I started my grad school, we (me and the better half) each had taken out huge education loan. But since we did not have to start paying it until we finished studying we didnt not “count” it. Next we went a bought a car. We probably could have done without it. We used some of the left overs from education loan and ALL our savings till that day, to pay for it in cash (no car payments) but it comepletely broke our bank. We didnt plan for future expenditure, and slowly started putting books and anything-beyond-the-everyday expenditure on credit cards. As we got comfortable doing this, our “lifestyle” started getting better and we just kept piling it on credit cards. When the finance charges started to catch up, we started to feel the burn. The better half got a job before me, but it was terrible to watch most of the paychek vanish, to pay back loans :( Its a disgusting feeling, when you finally start earning, but you cant keep the money because there are too many loans. And the interest on the loan is money you just give away, something you have never really got to use or enjoy.

Anyway, what I am trying to say is, dont treat your student loan and car loan like they dont matter. It is still debt. It is still something you need to pay back. Its still money that needs to go OUT from you at some point. High interest or not, pay it off fast. Just think of it, when you finally finish school and start working, with no or very less loan, you will easily be able to say, “richer than you, seriously!” (you probasbly shouldnt say it out loud, though) :)

(Whoa, long comment, sorry kinda got carried away. Don’t want to see someone else make the same mistakes as me.)

]]> By: Stephanie http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-102 Stephanie Sat, 13 Jan 2007 08:24:00 +0000 http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-102 The car loan has no interest because it's from my grandmother. She sold me her car, and I pay her monthly.<br /><br />I don't see how paying off the loan more quickly would be helpful - the extra money I would pay into it each month could be put my savings account, and earn interest. The only reason to pay it off quicker would be to make my grandmother happier, although she looks at this as a way to "spend her money," which he financial advisor keeps telling her to do.<br /><br />Thank you for the advice though, I'll look up Dave Ramsey on your site tommorow! The car loan has no interest because it’s from my grandmother. She sold me her car, and I pay her monthly.

I don’t see how paying off the loan more quickly would be helpful - the extra money I would pay into it each month could be put my savings account, and earn interest. The only reason to pay it off quicker would be to make my grandmother happier, although she looks at this as a way to “spend her money,” which he financial advisor keeps telling her to do.

Thank you for the advice though, I’ll look up Dave Ramsey on your site tommorow!

]]> By: MollysBrother http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-103 MollysBrother Sat, 13 Jan 2007 07:38:00 +0000 http://poorerthanyou.com/2007/01/12/the-debt-snowball-plan/#comment-103 The debt snowball is definitely for you. Even if your car payment is no interest--how is that possible?--you'll be able to double up on payments and make more than the monthly payment thus paying off the loan more quickly.<br /><br />Visit my site and search Dave Ramsey. Read his total money makeover.<br /><br />Thanks, too, for participating in my Friday Financial Forum.<br /><br />I look forward to you participating next week, too. The debt snowball is definitely for you. Even if your car payment is no interest–how is that possible?–you’ll be able to double up on payments and make more than the monthly payment thus paying off the loan more quickly.

Visit my site and search Dave Ramsey. Read his total money makeover.

Thanks, too, for participating in my Friday Financial Forum.

I look forward to you participating next week, too.

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