Getting Out of Debt Part 3

Let us look at the Two Methods in action. First though a few things you will see about my set up:

  1. You will also notice that my snowball values aren’t a 100% snowballed. This is because I am adding some of that post debt money back into the bank account to give us more free money and keeping us out of using credit cards. This new money can be saved for big things, given as “allowance” to someone in the house, or just free floated in the account to cushion it.
  2. We weren’t strictly paying the minimums before hand anyways. Debt annoys me, so we were already paying more than we had to. But with a new pay increase for us both, why not throw more debt under the payoff bus?

 

Method 1, lowest debt balance first. This Method pays off the lowest balance first and than snowballs that payment to the next balance.

US Bank Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$366.29 20% (300.00) 1.243812166 $373.14
Payoff Time Years
0.1036510139 5/8/2016
Interest Saved 13.49
Student Loan 2 Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$2,094.16 6.55% (368.00) 5.796666339 $2,133.17
Payoff Time Years
0.4830555282 10/8/2016
Interest Saved 187.20
Student Loan 1 Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$3,238.15 2.25% (400.00) 8.165088914 $3,266.04
Payoff Time Years
0.6804240762 6/8/2017
Interest Saved 227.58
Capitol One Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$1,496.89 8.90% (500.00) 3.038733211 $1,519.37
Payoff Time Years
0.2532277676 9/8/2017
Interest Saved 323.35
Car Loan March 11 Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$6,030.69 2.44% (700.00) 8.700461186 $6,090.32
Payoff Time Years
0.7250384321 5/8/2018
Interest Saved 373.23
Window Loans Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$6,616.90 4.40% (900.00) 7.466682084 $6,720.01
Payoff Time Years
0.622223507 12/8/2018
Interest Saved 1,119.66
Morgate Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$177,898.65 4.50% (2,500.00) 82.9290262 $207,322.57
Payoff Time Years
6.910752184 10/8/2025
Interest Saved 38,844.25

 

Here is what Method 2, Highest interest rate first, looks like with Snowballing:

US Bank Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$350.00 20% (300.00) 1.187949411 $356.38
Payoff Time Years
0.09899578425 5/3/2016
Interest Saved 0.00
Capitol One Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$3,916.39 8.90% (400.00) 10.2023187 $4,080.93
Payoff Time Years
0.8501932252 3/3/2017
Interest Saved 597.93
Student Loan 2 Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$1,623.57 6.55% (450.00) 3.653859517 $1,644.24
Payoff Time Years
0.3044882931 6/3/2017
Interest Saved 205.43
Window Loans Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$9,262.28 4.40% (600.00) 15.92036968 $9,552.22
Payoff Time Years
1.326697474 9/3/2018
Interest Saved 933.17
Car Loan March 11 Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$3,055.45 2.44% (800.00) 3.838121067 $3,070.50
Payoff Time Years
0.3198434222 12/3/2018
Interest Saved 417.86
Student Loan 1 Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$2,114.87 2.25% (800.00) 2.652644622 $2,122.12
Payoff Time Years
0.2210537185 2/3/2019
Interest Saved 248.10
Morgate Interest Rate Payment Minimum Payoff Time Months Payoff Amount
$176,765.77 4.50% (2,500.00) 82.31049717 $205,776.24
Payoff Time Years
6.859208097 12/3/2025
Interest Saved 39,257.00

The interest saved value is the difference in interests between just paying it off as you go and using the method and snowballing.

Both Methods get the debt payed off faster than you were just to pay the minimums. However, if you do the math, which we will look at next post, you will see that there are some very big differences between the two methods.

Enjoy!

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About Tara B.
Hi, I am Tara B. and its great to meet you!! I am an outgoing person with introvert tendencies. I have two amazing dogs that I love and adore! You will hear about them and their adventures a lot :D I also have the most amazing husband! Together he and I have Miss Go Go (you'll also see her referred to as Baby B) that was born in the spring of 2015. She is smart, quick learner, and loves to mimic everything she sees. I love to cook, bake, try to stay healthy, and read. I love to explore my area (and the world when life allows), and seek out fun things to do. You want more information just ask! I am horrible at writing "About You" sections...:) If you have any questions, comments, ect I can be reached at CraftsByTaraB@gmail.com.

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