Two Approaches to Paying Down Your Debt

Dave Ramsey once said, “Debt is dumb” and it has a choke hold on so many of our friends and family. In the Peer Money Mentor Program, we’re learning strategies on how to minimize and pay down consumer debt. Credit card debt is one of the most common forms of consumer debt. Think about this, companies like Forever 21, DSW, and GameStop are getting in on the credit game targeting consumers with store-specific rewards programs because they want to get paid too. According to, the average household credit card debt is of $15,482.  That’s a lot of dough owed and interest that will be paid just on credit cards, not to mention student loans, auto loans, and medical debt. So Lisa and I want to share some methods to help you with reducing your debt. They both are two very different approaches so check them out and see which one fits you the best.  

Krishna’s Method:  My method is called the “Debt Snowball” by Dave Ramsey and it consists of paying off your smallest debts first and once one is paid off, using the capital of that debt to go towards the next big one and so on.  I started with paying a small medical bill of $300 and haggled with the company until I got it reduced to $200 and paid it off on the spot. The satisfaction was immense to know that I had one less debt and it allowed me to stay motivated to set up a payment plan for the next big one which was around $1,500.  That is the point of the snowball method, small victories helps with the psychological motivation to keep going.  I have managed to pay off 3 delinquent accounts this way, and am still set up on a payment plan for one more. I am also keeping on top of my current bills so that way I don’t have to do this again but at this rate I should be able to finish off my degree debt free!

Lisa’s Method:  Managing debt for me is like pulling a splinter from my foot.  Painful but relieving once I removed it. I was able to utilize the Dave Ramsey “Debt Avalanche” approach to manage my debt.  This method is not for everyone, you pay the minimum on all accounts and use any excess funds to pay off the highest interest account. Knocking one account at a time and saving money from all of the high interest you would have paid.  This takes discipline and determination, so you have to be clear on who you owe, how much you owe, the interest rates, and due dates. The debt snowball isn’t for everyone, but it’s the most logical choice for me. 

Mathematically, the debt avalanche makes more since while the debt snowball gives you small wins.

If you need help with strategies in paying down debt, you can reach out to ACC’s Student Money Management Office by going to their website at to request a financial coach. Meeting with a financial coach helped us see the bigger picture.  In the end we were able to clear up accounts and now we’re living almost debt free.

We all have different ways in how we like to tackle things, either a little at a time or just get it done and out of the way.  The particular method you use does not matter, what matters is that you get your debt under control.