What are commonly endorsed strategies for paying off debt?

The snowball method and the avalanche method are widely endorsed strategies for paying off debt due to their effectiveness in helping individuals manage and eliminate their debt burdens.

The snowball method involves focusing on paying off the smallest debts first. This strategy provides quick wins and psychological motivation as individuals see their debts disappearing. Once the smallest debt is paid off, the extra money can then be applied to the next smallest debt, and this continues in a domino effect. This method emphasizes the emotional benefits of gaining momentum, which can encourage individuals to stay committed to their debt repayment plan.

On the other hand, the avalanche method prioritizes debts based on interest rates, concentrating on paying off the debt with the highest interest rate first. This approach can save you more money in the long run because you are reducing the amount of interest paid over time. After paying off the highest interest debt, you then move on to the next highest interest debt. This method is often recommended for those who are more motivated by financial efficiency rather than emotional rewards.

Together, these two methods represent effective strategies that accommodate different psychological approaches to managing debt while minimizing overall financial costs.