The Debt Avalanche Method Explained

Wondering what the debt avalanche method is and how it works? It's all explained here.Wondering what the debt avalanche method is, and how it works to get you out of debt?

In short, the term “debt avalanche” describes the order you pay down your debt in, and that order is based entirely on the interest rates you’re being charged. (A debt avalanche is sometimes also known as “debt stacking”.)

Here’s why you might (or might not) want to use a debt avalanche to pay down your debt.

Details of how the debt avalanche works

A debt avalanche works like this: you make a list of all your debts and then place them in repayment order from highest interest rate to lowest interest rate, regardless of the amount you owe on each one.

While you do make minimum payments on all of your debts, you focus hard on paying off the debt with the highest interest rate first, proceeding on down your list until everything is repaid. The only thing that changes over time is the amount you pay toward the debt at the top of your list.
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This Ridiculously Simple Method Can Help You Get Out of Debt

This method is so simple that if I just tell you right out, you'll probably roll your eyes and move on. But you shouldn't.I’m about to tell you something REALLY simple that can totally change your life.

It’s so simple that if I just tell you right out, you’ll probably roll your eyes and move on. But you shouldn’t.

So let me tell you a quick story first to set the stage…

I used to be a financial mess.

For years, I struggled to make ends meet. To pay off debt. To even just get my finances in some semblance of order.

Then I got divorced, and soon I was facing a job loss too. Things got worse. Basically, I was a mess.

I realized I’d better get my financial act together for my own sake and my son.

You know what happened? I started to actually focus on my money. I made it a priority instead of a wish.

And THAT made all the difference.

I was able to do a complete turnaround with my finances. (See our story here.)
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Get on the Path to Debt Freedom with the Right Words

Get on the path to debt freedom with the right wordsRecently I talked about how you can think your way out of debt.

Put briefly, literally changing the things you tell yourself and the words you use surrounding money can help to change your behavior. You can go from a debtor mentality to someone who’s solidly on the path to becoming debt free.

So how does thinking your way out of debt work? For starters, you’ve got to find the right words.
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