Advantages: The debt snowball effect has the power to keep you motivated to continue making progress. When comparing the debt avalanche versus the snowball effect, you might automatically assume that the best option is the first one, since you have the potential to save more in the long term. But if you lose momentum and instead give up on your debt payoff goals, you’re not doing yourself any financial favors.
Instead, give yourself the easy win with the debt snowball. Once you get the ball rolling, you’ll be inspired to keep funneling your extra dollars to paying off debt. One small win leads to a bigger win until you’ve ultimately knocked out your debt completely.
Disadvantages: The obvious disadvantage to the snowball effect compared to the debt avalanche is that you could potentially end up paying more cash in interest over time. If your smallest balance happens to have a low-interest rate, you’ll have more months where you’re paying on those higher rate accounts.
You really have to weigh the pros and cons of what motivates you more: saving money or having the stamina to keep making those extra payments each month. It’s an extremely personal decision and, ultimately, there’s no right or wrong answer.
Ready to start improving your credit score in order to qualify for lower credit rates? Get a free consultation with Solano credit repair to see how our credit experts can help you with the credit repair process.
1. Figure Out Where Your Finances Stand. Today Marriage is the beginning of a joint life together, and that means you both need to be honest about how you’ve independently managed your finances up to this point. Whether good or bad or likely a mix of the two, you need to sit down and go over both your current savings and debt. For savings, remember to include both basic savings accounts, any investments, and retirement plans through work or other sources.
For debt, add up everything you own on credit cards, student loans, car loans, and even a mortgage if one or both of you have bought a house already. All this information helps you understand what your big picture looks like when you combine your household.
2. Determine How to Share MoneyYour next step as a newly married couple is to figure out how you want to share your money. Do you want a joint account where all your earnings go? Separate accounts for discretionary spending? Or do you want to keep everything entirely separate? These are important questions to delve into because they lay the foundation for how much transparency is expected.
Also begin discussing each of your goals for the short-term, mid-term, and long-term. This involves some of those big-picture questions like if and when you want to start a family or how much you want to save toward vacation each year. Be open with your responses and remember that both of your opinions are equally important.
The basis of a good credit record is a solid foundation to work from and an understanding of what builds and what damages your credit. For this reason the first step in the credit repair process is a full analysis of your credit reports and history to check for errors, problems and any general issues that may be shown.
Helping people and businesses improve their scores allows them to:
The longer I work in real estate, the more I come in contact with people whom I believe are being scammed by credit repair companies. They have been promised everything from establishing perfect credit to having true and accurate information removed from their credit report. Many of these companies charge a hefty monthly service fee to do what could have done by the individuals themselves for little or nothing.
Instead, give yourself the easy win with the debt snowball. Once you get the ball rolling, you’ll be inspired to keep funneling your extra dollars to paying off debt. One small win leads to a bigger win until you’ve ultimately knocked out your debt completely.
Disadvantages: The obvious disadvantage to the snowball effect compared to the debt avalanche is that you could potentially end up paying more cash in interest over time. If your smallest balance happens to have a low-interest rate, you’ll have more months where you’re paying on those higher rate accounts.
You really have to weigh the pros and cons of what motivates you more: saving money or having the stamina to keep making those extra payments each month. It’s an extremely personal decision and, ultimately, there’s no right or wrong answer.
Ready to start improving your credit score in order to qualify for lower credit rates? Get a free consultation with Solano credit repair to see how our credit experts can help you with the credit repair process.
1. Figure Out Where Your Finances Stand. Today Marriage is the beginning of a joint life together, and that means you both need to be honest about how you’ve independently managed your finances up to this point. Whether good or bad or likely a mix of the two, you need to sit down and go over both your current savings and debt. For savings, remember to include both basic savings accounts, any investments, and retirement plans through work or other sources.
For debt, add up everything you own on credit cards, student loans, car loans, and even a mortgage if one or both of you have bought a house already. All this information helps you understand what your big picture looks like when you combine your household.
2. Determine How to Share MoneyYour next step as a newly married couple is to figure out how you want to share your money. Do you want a joint account where all your earnings go? Separate accounts for discretionary spending? Or do you want to keep everything entirely separate? These are important questions to delve into because they lay the foundation for how much transparency is expected.
Also begin discussing each of your goals for the short-term, mid-term, and long-term. This involves some of those big-picture questions like if and when you want to start a family or how much you want to save toward vacation each year. Be open with your responses and remember that both of your opinions are equally important.
The basis of a good credit record is a solid foundation to work from and an understanding of what builds and what damages your credit. For this reason the first step in the credit repair process is a full analysis of your credit reports and history to check for errors, problems and any general issues that may be shown.
Helping people and businesses improve their scores allows them to:
- Get better interest rates on loans
- Pay less for insurance
- Get a better chance of being hired
The longer I work in real estate, the more I come in contact with people whom I believe are being scammed by credit repair companies. They have been promised everything from establishing perfect credit to having true and accurate information removed from their credit report. Many of these companies charge a hefty monthly service fee to do what could have done by the individuals themselves for little or nothing.