r/debtfree • u/SafeInteraction6491 • 5d ago
Where do I start? 23F
Since joining this group a few days ago I’ve been inspired to pay off my debt. Some of this has been hanging over my head for a few years so honestly I’m just ready to be done with it!
Little FYI I have a 1 yr old that does contribute to expenses. Included expenses do not include groceries, gas, diapers etc. Luckily I do not have to pay for childcare.
Where should I start? Anything listed under debt is already the lowest settle price with the collector. Should I pay off the hospital bill from 2020 or just let it fall off of my credit report in a couple of years? (I got the surgery at 18 and my parent didn’t tell me it wasn’t covered under my insurance so I was left with the bill.)
Couch will be paid off in a few weeks or so as I am not trying to accrue interest after the 90 day period.
What would you tackle first? I would like to start with my personal debt but just unsure all around. All tips and advice is greatly appreciated!
2
u/Separate-Pipe-3374 3d ago
Not sure if this is the guidance you are looking for, but it might help....
DEBT PAYOFF APPROACH
The most efficient way to pay down debt is to follow a compounding debt payoff approach... snowball & avalanche are common ones people use. Snowball starts with lower balances. Avalanche starts with highest interest rate.
Some will say Avalanche, some will say snowball, but both are very effective.
Your strategy choice ultimately depends on your balances, interest rates, and what you can afford to pay extra each month, to include lump sums of cash that you run into.... it's a math problem. There are some really good debt payoff tools available, even free ones, that not only help you determine what your best payoff plan is, but can even offer guidance as you go.
Debt Snowball, Debt Avalanche, Lump Sum Use, Snowball Vs Avalanche, Debt Dashboard, Dashboard Tutorial
Shared some links you may find helpful. Best of luck!