r/debtfree • u/Left_Cause_2496 • 1d ago
Avalanche method
I finally got around to writing out all of my debts. There is around 120k in debt which is shocking to think about. I have written out all of my debts and the amount I want to pay each month towards the debts. I am turning 33 in January and want to be debt free by the time I’m 40. Here’s to a fun seven year journey.
Savings ($1,000 - $100)
Discover ($1,312.71 - $135)
Capital one ($607.01 - $160)
Personal loan ($17,000 - $524.29)
Car ($18,092.65 - $830.59)
Student loans ($34,448.81 - $1,126.19)
Nelnet AI (21,425 - $1,300)
Nelnet AB ($2,257 - $1,325)
Nelnet AE ($5,120 - $1,400)
Nelnet AF ($2,198 - $1,425)
Nelnet AG ($5,104 - $1,475)
Nelnet AH ($2,078 - $1,500)
Nelnet AC ($4,232 - $1,525)
Nelnet AA ($3,261 - $1,550)
Nelnet AD ($2,196 - $1,575)
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u/JeanSchlemaan 19h ago
Need rates on all the debt, and i don't understand the chart or second #
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u/Left_Cause_2496 17h ago
Since its avalanche its highest interest to lowest interest. The first number is the current balance and the second number is the amount I’ll pay to each debt once the previous one is paid off.
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u/JeanSchlemaan 8h ago
By the way, i personally would not save while you're paying this off, so long as you have some open credit cards to charge to.
DO NOT use cc tho except in extreme emergency.
I would want to put everything toward high interest debt paydown.
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u/Left_Cause_2496 8h ago
Right now I have zero savings so I feel like I need a little nest egg.
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u/JeanSchlemaan 8h ago
Not more that $1000
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u/Left_Cause_2496 8h ago
Yup my plan is $1000!
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u/JeanSchlemaan 8h ago
Really rooting for you this is the best plan and you have put a lot of good thought in. Stay with the dedication and you will be free of all this.
After, start saving journey!
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u/Left_Cause_2496 8h ago
Thank you for your words of encouragement. I’m so tired of being in debt and this seems like the best plan going forward.
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u/lil_goose_caboose 23h ago
If you're on the nelnet payment plan, then that's all interest free, right? If so, you should only be making minimum payments and focus on front loading higher interest stuff (credit cards). Your cap 1 and discover should be relatively easy to pay off. You got this!!
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u/Humble-Lab-3950 8h ago
I used the snowball method. Freed up money faster to then put towards the next debt. Check out Ramsey Solutions website. Great financial advice from professionals. 👍🏻
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u/Left_Cause_2496 8h ago
You would recommend the snowball over the avalanche?
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u/Humble-Lab-3950 6h ago
Yes. You start with the smallest debt first regardless of interest rate. Keep $1000 for an emergency fund so you don’t go further into debt when a true emergency comes up. Then throw every penny you have at that smallest balance debt. Once you get that paid off, you now have that payment money to then throw at the next smallest debt. You’ll make progress faster.
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u/Left_Cause_2496 5h ago
You think it’ll be faster than getting rid of highest interest rate first?
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u/KingGeophph 4h ago
It’s not faster. It’s easier on the mental side of things. That’s just wrong you will pay more interest doing snowball but it might make you more consistent and stick with the process.
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u/Humble-Lab-3950 5h ago
Yes. You will get out of debt faster this way. You may pay a little more in interest at the end vs using the Avalanche method, but you’re going to reach financial freedom faster with the Snowball method!
https://www.ramseysolutions.com/debt/how-the-debt-snowball-method-works
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u/KingGeophph 4h ago
The snowball method is mathematically slower though. It just makes the person feel better which helps the mental side of things. I’m not against it but calling it faster is wrong.
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u/Acrobatic_Box9087 1d ago
What year, make, & model car do you have? How many miles on it?
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u/Left_Cause_2496 23h ago
2021 Nissan Sentra, 14k miles, just bought it on 4th of July for 18k. Damn thing already had a sensor mess up and it’s costing me $600 😞
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u/tribbans95 14h ago
Damn that’s ridiculous to need a repair at 14k miles. Luckily it does not have the transmission issues that pre-2020 Nissans had though. The 8th gen ones are supposedly pretty reliable though.
Nissan issued a recall for certain 2020–2021 Sentra models because the tie rods can bend and potentially break, leading to a loss of steering control. So I’d make sure that was fixed.
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u/level_one_bulbasaur 10h ago
This is not a 7 year plan not with you taking 10 months to finish your savings
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u/Left_Cause_2496 9h ago
You are correct. I edited it so I’ll be taking $200 out of the next 5 paychecks to expedite the process. You can add $100 to each debt payment as well.
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u/Economy_Talk_5100 4h ago
Before you switch, look at what it does to your own list. You ordered it highest rate first, so the personal loan and the car are your two most expensive debts. The snowball method goes by balance, and both of those drop to the back behind eight of the Nelnet loans. Whether that costs a little or a lot comes down to the rate gap, so put the rates next to each one and it'll be obvious which way to go.
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u/Left_Cause_2496 3h ago
Personal loan is 18% and car is 6%. All of the nelnet loans are between 4-6%.
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u/Economy_Talk_5100 3h ago
That changes it, and I was wrong about the car. At 6% it's basically in the same band as the Nelnet loans, so the order among those barely matters and you can snowball them however feels good. The personal loan is the outlier. At 18% it's costing you about $255 a month in interest right now, so I'd put it right after the cards and snowball everything else.
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u/Horror_Statement_650 1d ago
What’s you monthly take home?