Aaron Whybrow explains the debt snowball method: pay minimums on everything, throw extra money at your smallest debt until it's gone, then roll that payment into the next one. You get quick wins that keep you motivated to keep going.
How to Pay Down Multiple debts. Hey, it's Aaron from Diagnostics and Finance and here's my tip for you. Wherever you are and whatever debts you have, there may be a statistical thing out there or some tips that you should go and pay out the highest interest rate debt first and then go to the next ones. My tip for you is slightly different. Let's get your biggest debt, pay the minimum amount. Let's get your smallest debt, and let's just hammer that smallest debt out. When we take the extra repayments from the big debt and put it into the smaller debt, we start to see that change and go away. Once that loan is paid out, you feel good, you celebrate. And then you have to take all those repayments that you're making from that debt and put it onto the next biggest debt. And then you'll see that that next biggest debt will just drop, drop, drop, drop, drop. And then you can get all this other debt and then put it back into the next thing. Now, I know it's summer at the moment and the ski season is a bit over, but it does have a snowball effect. Once you get rid of one and you feel really good and you get rid of the next one, you feel even better. You get rid of the next one, you feel really better. Once you got rid of all your debt, then you can get all that money and shove it into a bank account. You might get some other advice on other investments, but then you can start building up that deposit for your home. Hey, it's Aaron. Hope this is helpful.
