How to Payoff Debt fast: using the Avalanche and Snowball methods! This is the first in a series on Personal Finance for Beginners, enjoy!

📌 Subscribe for Weekly Videos: https://bit.ly/humphcrew

► My Stock Portfolio ➭   / humphreytalks  
► Investing Discord ➭   / discord  
► Get a Free Stock (valued up to $1400 when you deposit $100) with WeBull ➭ https://a.webull.com/i/HumphreyYang
► Robinhood (get another free stock!) ➭ https://robinhood.c3me6x.net/qPyKY

📷 Instagram:   / humphreytalks  
📲 Tik Tok:   / humphreytalks  
🐪 My free weekly newsletter ➭ https://humpdays.substack.com

The avalanche method prioritizes the highest interest rate debt to be paid off first. The snowball prioritizes the smallest balance.

Let's say you have 3 sources of debt
Car Payments, Credit Card Payments, and Student Loans.
-You owe $9000 on your car, and your interest rate is 3%
-You owe $10000 on your credit card, and the interest rate is 18.99%
-You owe $15000 on student loans, and the interest rate is 4.5%.

In the avalanche method, you're paying off the credit card balance first, then the student loans, and then finally the car payment. (10000, 15000, 9000).

In the snowball method, you'll pay off the car payment first, credit card 2nd, and then student loans 3rd.

Now in this HYPOTHETICAL example, lets say you can pay off 3k a month in debt (just as an example). The most efficient one financially is the avalanche method, and by doing this order you'll pay $1011 in interest, versus if you did the snowball method you'd pay $1514 in interest. The difference is going to be even magnified more if you can't pay off 3k a month in debt.

So while the avalanche method may payoff your debt in a more efficient manner, sometimes the psychological wins are WAY more important in getting there.

Personally I think making progress on anything is better than nothing - and if you're the type of person who can stay disciplined when it comes to paying off debt - the avalanche method is the way to go.

▶️ My name is Humphrey Yang, I am an entrepreneur who has built businesses and am passionate about Personal Finance. This channel is dedicated to helping people (whether you're 21 or 81) become better with Personal Finance, Investing, and Entrepreneurship. I hope these videos help!

📧 Contact: If you have a question feel free to leave me a comment on my videos or follow me on IG and send me a DM! If you have a business related inquiry, please then send me an email at [email protected]

Disclaimer: I am not a financial advisor, any investment commentary are my opinions only. Some of the products and services that appear on this channel are from companies that I have an affiliate relationship with, such as Robinhood, for which I recieve a small percentage made via those links, but it doesn’t cost you anything extra!