@baobudget: Which debt do you pay off first? Two common ways to order extra payments, shown on one example: three cards, $335 a month in total. Avalanche method: highest rate first. In this example it costs about $1,259 in interest, but the first card isn't cleared until month 17. Snowball method: smallest balance first. The first card clears in month 3, but interest comes to about $1,429. Same debts, same payments: about $170 less interest, or a first card cleared 14 months sooner. Research hasn't settled which one is better. Learn more at BaoBudget, link in bio. Save this for the next time you're planning extra debt payments. General education, not advice. Examples are illustrative, not guarantees. Bao is not a fiduciary, and this is not personalized financial advice. Sources: CFPB, Your Money, Your Goals toolkit; Journal of Marketing Research (2012). #debtpayoff #debtsnowball #debtavalanche #creditcarddebt #PersonalFinance #financeforbeginners

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