Comments on: The Debt “Snowball” Or Debt “Avalanche” May Not Be Best For You

By: Posts That Motivate and Inspire Week #3 | The Passive Dad

Posts That Motivate and Inspire Week #3 | The Passive Dad — Tue, 09 Sep 2008 20:10:10 +0000

[...] Dollars wrote The Debt “Snowball” Or Debt “Avalanche” May Not Be Best For You that discuses whether you should pay off larger creditors first. Dave Ramsey talks about the [...]

By: todd

todd — Sat, 06 Sep 2008 13:42:12 +0000

Very good point Mille. I have often considered switching to a high deductible plan outside of my employer so I never have to worry about having coverage. It appears from pricing such policies though that my employer must be paying for a large portion of my coverage. It also looked like pregnancy wasn’t covered by a lot of policies, but that may have changed.

By: millie

millie — Wed, 03 Sep 2008 14:47:36 +0000

One more thing about health insurance: since so many health insurance companies have no coverage for “preexisting conditions”, it seems like you ought to get it when you’re younger & healthier, so that they will have to cover any condition you get later! The point is, it’s important to have coverage even if you won’t have one huge medical event, such as a car accident or appendicitis. Ongoing conditions can be super expensive! (E.g. I am young & have rheumatoid arthritis. If I didn’t have insurance, it would be $200-300 every 3 months for the doctor visit, plus $300-400 every 3 months for my blood labs. PLAN AHEAD! : ) )

By: Pete

Pete — Wed, 27 Aug 2008 17:23:11 +0000

Interesting post – as Dave Ramsey says – you can’t get wrong getting out of debt! If you want to do the snowball, the avalanche, or whatever- just do it! You can’t get wrong getting rid of the debt.

As far as health insurance, if you don’t have it – GET it! My wife, who is normally very health, had a surprise blood clot this year. $250,000 dollars later she’s doing a lot better -but without that coverage we would have been bankrupt! I also had surgery to remove my appendix a few years ago, and without insurance it would have been over 20k. In my opinion health insurance is a must!

By: Kenny

Kenny — Mon, 25 Aug 2008 20:36:43 +0000

I’ve just started to really take serious, radical steps toward fixing my financial situation. I’m about $45k in debt: credit cards, cars, and student loans.

My plan is to mostly follow the Debt Snowball, because I do think I need the ‘wins’ to motivate me, but I believe I also need to use math as well as psychology. If I have a $4k debt at 5% and a 5k debt at 29%. I’m going to pay down the 29% first, even though it’s the larger balance…

Although, I might consider paying down the lower interest rate first, if it frees up more monthly money. So if that $4k at 5% is $300/mo, but that 29% is only $150/mo, I might consider paying down the 5% first, to free up the $300 which can then be thrown at the 29%.

Either way, I agree with you that there’s not necessarily one right answer. I think Ramsey is just teaching by KISS.

By: Michael

Michael — Mon, 25 Aug 2008 13:23:58 +0000

Student Loan debt can’t be removed by bankrupcy but it CAN be differed under a “hardship” circumstance. If you lose your job or face a sudden and dramatic reduction in income, you can request that the payments on your loan stop for a certain period of time until you can get back on your feet.

Most student loan providers will agree to this as they would rather have you pay the loan back than default entirely.

By: Carnival of Debt Reduction by No Credit Needed

Carnival of Debt Reduction by No Credit Needed — Mon, 25 Aug 2008 12:48:22 +0000

[...] Dollars has a very interesting post about which debts to pay off first. I really, really like this [...]

By: Scott @ The Passive Dad

Scott @ The Passive Dad — Wed, 20 Aug 2008 20:41:59 +0000

I’ve always thought the debt snowball approach can work well with people that have never established a budget and don’t know where to start. It gives them “quick fix” to see debt repayment in action. I do agree that it may not make the most financial sense, as the highest cc cards might carry bigger rates.

I enjoyed reading this new twist to the debt snowball approach and will include it in this weeks “Posts that motivate and inspire”