Financially Fit Friday - January 12, 2018

Financially Fit Friday - Week 2

Have you tried the Snowball Method?

This week in our 4-part series of financial tips and solutions for a fit 2018, we’ll look at another effective way to reduce your debt.

Follow this example:

  1. List debts smallest balances to largest balances.
    • Credit Card $500 ($25 payment)
    • Student loan $3,000 ($50 payment)
    • Car loan $10,000 ($300 payment)
  2. Work toward paying off the credit card as quickly as possible while you still make your student loan and car payments and other monthly obligations. (Can you afford to pay $50 toward the credit card a month? If you can, do it!)
    Snowball Step 2

     
  3. Once the credit card is paid off, apply that amount toward the student loan.That means you are doubling the student loan payment, paying that off twice as fast, savings tons of interest.
    Snowball - Step 3
     
  4. Repeat the process until all debts are paid in full.
    Snowball - Step 4

FIT TIP: Once debts are paid off, try stashing the final payment amount (or as much as you can) into a savings account for emergency funds!

Railway Credit Union offers financial solutions that give you the power to live life your way. Stop in and see us for more ways we can help you save.

Don’t forget to check back next Friday for another tip. If you missed week 1, you can read it by following this link.