DEBT SNOWBALL vs AVALANCHE vs TSUNAMI vs TORNADO | Pay Off Debt Fast | Save Money |


Did you know you can save months by paying
off your credit card debt by using the right strategy? By the end of this video, you’ll know which
strategy is right for you. We’ll be covering debt Snowball, debt Avalanche
and debt Tsunami. We’ve crunched the numbers of all three, to
give you the best one. So what are these three strategies, to paying
off your credit card debt? The first one, and made popular by Dave Ramsey,
the debt Snowball. And this is based on paying off your lowest
balance first. So whichever credit card has the least amount
on it, that’s the one you go for first, doesn’t have anything to do with interest rate, it
is purely a psychological method because it gives you a quick win from the beginning,
so you can see that debt gone. And this is the one where you actually pay
the most interest in the long run and it’s the slowest way of paying off your credit
card debt. So the second method is the debt Avalanche
and the debt Avalanche, I’m not sure who coined this strategy, but whoever it was, was good
at math. So this is a mathematical base principle,
instead an emotionally based principle. This looks at your highest interest rate credit
card first and that’s the one you’re going to attack first, and that helps reduce the
amount of interest you’re going to pay and you can pay off your debts once faster than
using the debt Snowball method. And the third one is debt Tsunami and this
one is based on paying your most emotional debt first. So if you have a debt to a family member or
a friend that is really weighing on you that makes you worried, it keeps you up at night,
this is the one you pay off first and this method helps you to overcome that emotional
barrier right away and then after you pay off the most emotional debt first you go to
the debt Avalanche where you pay off the highest interest rate. So we wanted to give you a sneak peek into
our fourth method, which is, what I mean how I teach our clients and people who are join
our course and it’s like a debt Avalanche but with a little bit of twist and we haven’t
named it yet, but maybe we should call it the debt Tornado, because they’re all crazy
weather-related, so we might as well keep with the theme. So what does the debt tornado entail basically
like I mentioned it’s the debt Avalanche with little twist. So a lot of these strategies, their very first
step, like Dave Ramsey’s baby step number one, is to save up a thousand dollars in your
account as an emergency fund. We don’t agree with that, and we know that’s
pretty controversial, but I’ll explain you why. If you have a thousand dollars, saved up in
a savings account, earning you one percent interest, but then you have 10 000 dollars
and a credit card balance that has an interest rate of 30%, you could take that thousand
dollars and knock out some of that debt and stop paying interest on that thousand dollars,
or you can keep it in this account and that will help you from putting more money onto
that credit card, but I’d rather pay that 10 000 to 9 000 and maybe go back to 9 500
and then just keep paying it down instead of keep a thousand dollars here and then keeping
interest on 10 000 dollars. Speaker 2 : And the purpose of the Dave Ramsey
Snowball method, is to fell like you got a win and you’re making progress. But with our clients, we’ve been able to
show them through visual methods, using spreadsheets and graphs, that they are making progress
even when they have unexpected expensive and hiccups come along. So it’s really all about tracking, and if
you want to download our ten minute money checklist below, that is exactly what we do
every week to check in with our money and to make sure we are staying on track and making
progress to achieve our goals. Definitely. Mindset is super important, so when you’re
tackling one of your debt by one of these mathematical principles like the avalanche,
or what me and Allyson teach, is really important to make sure you have that set up front so
our money the checklist really helps with that and with our clients and coaching students
we go through a whole series of exercises and things like that to uproot limiting beliefs
and make sure your money mindset is in the right place so you can really jump in and
budget and pay down debt effectively and stay on track. So what’s the benefit to not keeping that
thousand dollars in your bank account from the numbers we’ve crunched and we have a
spreadsheet we’ll go over in a lot more detail in another video, just kind of showing
you how this method plays out with the numbers, we have shown that you can pass your debt
10 to 20 percent faster than the debt Snowball or debt Avalanche. So you can shave off months, to even years
depending on your personal situation. So, if you want to see more in depth deconstruction
on our debt Tornado strategy, how it can save you months and thousands of dollars off of
paying down your credit card debt make sure to hit subscribe and leave us comment, saying
debt Tornado, because we just coined that phrase right here right now and we will post
that video next week for you guys to make sure that you understand it fully and you
can apply it today.

12 thoughts on “DEBT SNOWBALL vs AVALANCHE vs TSUNAMI vs TORNADO | Pay Off Debt Fast | Save Money |

  1. Just recently subscribed as I enjoyed your van build & tour. Nice to see a young couple being responsible with their money, housing and explaining how credit card debt should be managed & paid off. I've been lucky enough to live within my income and disciplined enough to not incur crazy high credit card interest, but many do fall into that trap. Good advice.

  2. Ooo, the Tornado does sound like a good plan. For the first time in years we are carrying a small debt (we see it as an investment in our new home, but we did have to pay up front) Even now we made sure to look at all our options and to make sure we are getting the best interest rate. All the little bank fees add up, and you're totally right I think, keeping emergency money separate, but paying all that interest on credit card debt is killer. Love the tips!

  3. i really wanted to like your channel you guys and i was a subscriber but honestly i realized all you really did was just a "what i did for my summer vacation" vanlife thing, maybe just hoping to profit as a youtube channel and get views?

    now idk what this is. sorry. best of luck to you.

  4. When you say pay the 1000 dollars from the bank account, do you mean the 1000 dollars, baby emergency fund? And if that is the case, can you explain how people can manage for instance a water leak/car repair/replacing some house hold machine without going into more debt? Or is the idea that they DO gain the debt again but your motivational charts will still keep them motivated?

  5. Mark Goudy sent me. I'm from the UK, our Dave Ramsey equivalent is a guy called Martin Lewis, who also says don't bother having an emergency fund, just pay down debt. If you have an emergency put it on a credit card and you will have at least 30 days grace to pay the card back.

    I paid my last two debts off another way. I had a Barclay card debt and a Barclay loan (guess who I banked with). The Barclay card debt was the smallest amount and higher interest than the loan, so snowball or avalanche, the credit card debt should have been paid off first. The credit card debt was £60 minimun payment (a percentage of the balance so it reduces every month) , the loan was £285.10 every month.

    However, I became ill and phoned my bank and said I would be struggling to make my loan payment because I had been off work. Naturally they were rude and unsympathetic. Despite being told by the hospital to take another two weeks off, I dragged myself back in to work and somehow I made that loan payment.

    I vowed to pay that loan off early because the montly payment was much bigger than the credit card payment. If I ever got ill again I would be in the same boat struggling to find £285.10, it would be much easier to find £60, £59, £58 etc( the credit card payment). I could buy less food, do a side hustle, sell something on e-bay. Paying off the loan first would also increase my cashflow by £285.10.

    Anyway I paid the loan off an entire year early, but as it was at the end of the loan period I didn't make much savings on interest. However, in a dramatic financial twist my bank had changed their computer systems during my loan period and had for years miscalculated my interest. Which I could see on my annual statements. I thought it best to pay the loan off completely then query it.

    In UK law if interest is miscalculated from the point this starts until it is discovered that interest is no longer payable or has to be returned. I therefore got a huge interest refund cheque from my bank,
    which I used to pay off the credit card, et voila debt-free!

    My question is, does this method have a weather system named after it? Where regardless of the amount of debt or the interest rate, you pay off the debt with the largest payment first to ease and improve cashflow, and stress.

    Also, loving your channel finance videos and RVs.

  6. seems like folks are just reInventing Dave's program. debt is more about BEHAVIOR and not Math..if it was about math folks wouldn't get into credit card debt paying ungodly interest rates. Dave Ramsey rates WORKS and a recent study shows that folks that follow his methods get out of debt faster and have better consistency.

    Stop trying to reIvent his wheel. smfh

  7. So what if you don’t have a credit card? Maybe you have car and school loans. Do you suggest someone getting a card credit as an emergency fund?

  8. He cleared up all my loan obligations and helped pay my phone bills (Verizon, Sprint, AT&T only), also got a $8000 transfer to my Citibank account. You can reach him on Whatsapp: +1(201)201-1042 or [email protected]

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