Which Debt Should You Pay Off First?

There are standards and then there are nuances where you can change it up. So we're going to go both into the standard advice and then also give you tips for customizing it because most of the time what's best for you is going to be somewhere in the middle of the standard advice. Yeah, we might know we want to tackle our debt, we want to pay it off, but then we start to look at our debt and say, well, okay,

what's the strategy. How should I have best strategy? If we have more than one debt, which many people do, you need to kind of think about how in what order am I going to tackle this, What's what's my game plan? And beyond. So we're here to talk about that. Sometimes we think too much about it and are paralyzed from starting and so hopefully it can also be on the other end of that spectrum, helpful to say, hey, it doesn't matter. This doesn't matter as much as everyone

says it does, and you can change it up here. Oh, speaking of debt, this episode is brought to us by Debt Free Stories. Who's debt Free Stories? Your debt Free Stories? Oh I'm so excited I did to keep announcing. Our new YouTube series is live and releasing weekly through February. That's February three, but you know YouTube, those videos will

stay up there even if you're listening beyond February. So you all have continually asked us for more debt Free Story interviews and we are delivering on that in this ten episode series with listeners just like you, who have paid off debt in various ways and from a variety of backgrounds. We hope you'll find it as inspirational as we did. These were so fun and their video recorded

so you can see us see the person talking. Head to YouTube dot com slash Frugal Friends to catch our first episode ever, and be sure to subscribe and turn on notifications to get updated when every episode drops. Yes, can you tell we're like so over the moon about this. So we just at the time of this recording, have have recorded the first few and they are fantastic. They are the perfect mix of practical advice and inspirational story

from listeners just like you, from normal people. And I think that's what makes the story so special is that these are not people who claim to be experts or who claim to do anything particularly exceptionally. They recognize too that I'm a normal person and this is how I did it, and and that to me is inspiring the most inspiring. So I hope that they help you and inspire you as much as they have inspired us recording them. Yeah, I mean, yeah, they might consider themselves normal people, but

they're all so amazing. I don't think I realized, I don't. Our listenership is well very cool. I mean maybe they're a little bias, but also super why eys accomplished, talented, skilled again, variety of backgrounds like types of jobs. It was like really eye opening to see the like, who all is tuning into this podcast? And you all are some You're You're the cream of the crop out there. You are fantastic people, so and we have been honored that you have been willing to share your stories with us,

and we're honored to share them. So definitely subscribe to Frugal Friends on YouTube and hit the notifications button to get all of the debt free stories as they are released throughout the rest of the month in February. And we're only going to keep doing it if it's as success. So if you like it, let us know that it's a success by subscribing and hitting the notification button, and then we'll keep doing it. We'll do and we'll do a second season. Yes, so let's get into which debt

you should pay off first. If you are interested in paying off your debt this year, then there are a few other episodes that we have. I would say there's probably at least a good twenty if not more episodes that where we just talk about the logistics of paying off debt and how to do it faster. Obviously, though the talking about the debt strategy, the debt payoff strategy is a small portion of it. The bigger picture in paying off debt is the small things that you do

every day. It's the choosing to stick to a meal plan and a grocery list. It's choosing to say no to, you know, spending on things that you don't value, or spending on maybe not spending on things you do value in order to get something you value more. So it's stuff like that, But it is really helpful to have these like overviews of basic debt payoff topics. And so episode one seventy one we talked about should you focus on paying down debt right now? Where we kind of

compare it to other financial goals. You could that paying off debt could be competing with UH And then an episode one eight we talked about why paying off debt is important and attainable. So if it's not your primary goal, what are the circumstances in which it should be, and why it's more attainable than you think. Maybe you're not setting it as your primary goal because you don't think it's possible. So we kind of debunked that myth in

this in episode one eight. But for two seventy six, we're talking about debt pay off order a hotly debated topic, and there's so many things to debate apparently, yeah, I mean, we don't have much to debate in personal finance because so much of it is very standard advice, and so we choose things like this, the debate should I or shouldn't I pay off my mortgage early? And voy people get heated. Yeah, it's it's crazy. So so first we're going to cover in this first article UM from Investor

PD of the debt avalanche versus the debt snowball. We're gonna talk about the difference because these are the most these are the standard ways to pay off debt in an accelerated way, So let's just cover them. Get a foundation, talk about the pros and cons, and then in the next article we're gonna go to nuances on how you can customize it. M what did you What do you think about the debt avalanche first debt snowball debate? Where

are you? I think I would lean more towards the logical side of things, attacking the interest more than the emotional side that might be more closely tethered with the debt snowball. I know you're about to explain the two jen and so our listeners will understand more. But I think I would lean more towards the avalanche if I were to be going back and doing this all over again. But Lord Willing, I won't be Lord Willing. This dead

freedom will stick. Lord Willing, all right, So yes, I will cover what they are and then Jill is going to cover like pros and cons. So let's start with the debt avalanche. I to enjoy the debt avalanche I, but honestly, ultimately I prefer combination. We'll get into that later.

But so the debt avalanche, for those who are unfamiliar, involves making minimum payments on all your outstand the outstanding accounts, so all of your debts, and then using any remaining money that you've earmarked for debt to pay off the bill with the highest interest rate. So how you would do this is you would list all of your debts with from UH and the prioritization would go from highest interest rate too low list interest rate. And this is

assuming these are all fixed interest rate. If you have a variable, then that order obviously can change as the variable interest changes as it varies, but at a at a moment in time, whatever the interest rate is, we're listing from highest also called a p R annual percentage rate to lowest. So their example, they use a ten thousand dollar debt on a credit card at eighteen point nine nine. That's the first, Uh, the nine thousand car loan with a three percent interest rate. Good for them,

that's no, they don't have it listed out. So the next one would be their fifteen thousand dollar student loan at four and a half, and then would be their nine thousand dollar car loan at a three percent interest rate. So that that is their list of debts in order of you know, we got like nineteen four and a half three, and that is the percent, and that is the order in which you would pay them off, not paying attention to the amount on the loan. Yeah, does

that cover it? Yeah? I think that that. Yeah, you're you're you're prioritizing which one has the highest interest rates. Getting them out of the way is so that you're not paying as much towards the interest, And that would be the pro of this approach is that you're going to save hundreds, if not thousands, depending on how big of loans or debt you're in on paying it off more quickly, throwing more money at that principle, and less money just at the minimum payments, which is largely going

to the interest. So the argument here is that you're going to pay less money and interest over time when you tackle it this way, rather than only focusing on the amount of each loan. The other thing that the article references, and I'll get your take on this to Jenna, didn't totally makes sense to me. But they were referencing a pro of the debt avalanche method being that it can reduce the amount of time it takes to pay

off the debt. But I don't see why that wouldn't be like just across the board, Like if you're going hard at debt payoff, you're just reducing the time across the board. Don't know why this method would reduce it more than another. Yeah, because it lessens the amount of

money you're paying. Theoretically, it lessens the amount of time because if you have the same money to pay off debt, if you're paying off the higher interest rate first and saving money, than theoretically you are saving time as well. But I've done I've done various calculations with debt snowball versu debt avalanche, and I mean ten times out attend the debt avalanche does save you money for the amount of time for that money. It's it's usually just maybe

a month or two, honestly, like it's not a lot. Yeah, and they only referenced a few months as well, But I mean, when you get close to the end of debt payoff, weeks and days means something to you. So and then some of the cons to the debt avalanche that they reference is that it can take maybe a greater degree of discipline and commitment to make more than

the minimum payments. One of the one of the things that is referenced by both those who really rally for the snowball or the avalanche is that sometimes your debts that are larger in amount and you're just chipping away at them, you don't have all of the emotional kind of motivation behind it to be paying it off, and so it requires kind of this consistency rather than like

a win here and there. So if that's you, then that might be viewed as a con But and then it's also recognizing that it requires a conser just an amount of discretionary income, meaning extra money to throw at this debt. I would argue that that's any debt payoff scenario, like it requires you to set aside more money to throw at it, so that many. That's just a con

of debt payoff in general. Yeah, I I love the avalanche and I don't think I don't think either method has as many like cons or they're they're very they're being very generous on on what they're considering pros and cons. But yeah, if you want to optimize your if you're a very math oriented person, in the numbers are really

what motivate you. The debt avalanche system is going to motivate you more than the debt snowball because every dollar you pay off essentially counts for a little bit more money you have moving forward, and honestly, like so does the debt snowball. So it's just like a when we get into the nuances and and really talk about how we can create a hybrid version of these, that's where I get really excited. But for what it's worth face value,

this is the debt avalage. Next is the debt snowball, which involves listing your debts out from smallest amount first two largest amount, and I know some people will do it where they will Like in student loans, there are typically multiple loans within a student loan account. Um Like I know I had probably two loans per year. Uh, so they will either count that as one or they will separate it out each one in their debt snowball

again up to you whatever makes you feel good. So but it's listing it out from smallest to largest and essentially tackling the easy jobs. First we tackle the smallest debt and then work up to the largest debt, so that by the time you get to the largest debt, you have built so much amountmentum, so much self confidence that you are able to finish quickly, finish with the same momentum. And it is a great psychological like method for paying off debt because, like what Jill said, paying

off debt is just hard. It doesn't matter which method

you're choosing, it is hard. So, for their example, using the same debts as we used above, and they would um start with the nine thousand dollar car loan because it is the smallest debt even though it's the smallest interest rate, then go to the ten thousand dollar credit card debt, and then to the fifteen thousand dollar student loan, so they essentially are paying off they're keeping that nineteen percent a pr credit card around for however long it takes to pay off the car Loan, and that that

may not sit well with a lot of people because these debts are so close together, so we're talking nine thousand, ten thousand, fifteen thousand. I think where the debt snowball very much shines is when you've got your nine year, ten year, fifteen, but you've also got a couple of credit cards with maybe like a thousand here, nine hundred there, uh, stuff like that, because that really cleans out the debt,

so to speak. So anybody who's decluttered or simplified knows that when you declutter, you just feel better, You feel better about things. To get out all the clutter of your finances is a very similar feeling. When you're staring down ten different debts and you're able to clear out four, five, six of those with relative speed, then that can be super motivating just it feels very good. So so that's where the debt snowball really shines is in those situations.

One of the things that this article didn't seem to touch on, but has been my understanding of the debt snowball is not just getting rid of your lowest amount debts first, but that there's this like compounding nature to the snowball. This has been my understanding with with this method is that you continue making minimum payments on all of your other debts while throwing extra as much as you can to the lowest amount of debt. And maybe

that's budgeted. It doesn't have to be willy nilly. So let's say you know, this is a certain amount you're

able to put monthly towards that lowest amount debt. Then once that's tackled, you add that to you the next debt, the next lowest amount debt, and add that on to the minimum payments, so that each time you're kind of increasing the amount of debt you're able to pay towards the next debt because it's what you're already used to having paid, if that's making sense, And this article didn't reference that, but I feel like that's part of even like the imagery of the snowball is as it rolls

in the snow, the snowball is getting bigger and bigger, You're you're putting larger chunks of money towards the next debt, which is part of what makes it helpful to go at it in order of amounts, because then by the time you get to the highest loan amount, you've got the most money to put towards it because you're kind

of compounding the payments towards it. Yeah, I'm glad you explained that, Jill, because it does give you the snowball, does give you the best visual representation of that in that method, because the bigger the debt, it's the bigger the amount of money you have to put towards it. But the same thing happens in the avalanche. It's just that the amount of the debts may vary on both methods.

You are paying your minimum on every single debt. It's just in when you budget and maybe you have you have five hundred dollars a month to put towards debt. When you add up all of your minimums, that adds up to four hundred dollars. So it's where do I put this extra hundred That is the That's what these methods are really explaining there or helping you prioritize, is

where does that extra margin go. In the debt avalanche, that extra margin would go to the highest interest rate loan, and then once you pay that off and maybe your minimums, you're getting rid of a credit card, so your minimums now three fifty. Now you have a hundred and fifty of margin. That hundred fifty now goes to the second highest interest rate. With the snowball, you our margin goes

to the smallest amount debt. When you pay that off, then you have three fifty for minimums hundred fifty in margin, that hundred fifty goes to the second smallest debt. So you're doing the same thing in both methods. I think you get a little bit more of a visual gratification when you are doing the snowball, but it's happening in the avalanche as well. Nice yeah, yeah, So as far as pros and cons, I mean we've said it already, but with the snowball, it's a lot more of that

emotional side, the motivational side. When we can get these quick wins, it can help us to keep going, which I don't want to downplay there. There is a big part to debt payoff that has to do with our mental, emotional or relational physical state. And so if seeing an accomplishment is going to be a big motivator help keyep you on track, then then the snowball is worth considering. Again, Like Jen said, if you're a little bit more logical, and it's the numbers game, and that's what's going to

speak to you and keep you on track. Then then then it might be the avalanche that you want to move towards. Certainly with the snowball it can be easy to implement as well. I mean, but both of these are either one is taking a quick look at the numbers and deciding which way you want to tackle it.

But then, of course the con of the snowball is that you could incur more interest or yeah, if if it takes longer, if you end up paying a high interest loan later because it's a greater dollar amount, then obviously you're going to pay more in interest, and so in that regard, it could take longer to become debt free. But again, as we said, maybe months different from each other, not a large amount of time in the grand scheme of things, and usually not thousands of dollars easier either,

it's usually in the hundreds. Which whatever keeps you motivated to pay off the debt faster, it's going to be a wash, honestly, whether you if the snowball keeps you motivated. And this comes into they have a few questions to help you decide at the end of this article, and

one of them is which is better? And the one that's better is the one that you're going to stick with, because if the psychological accomplishment side is going to do more for you than the debt avalanche or the simplifying minimizing the number of debts you have is going to help you more, then and help you stick to it, that one is better for you. And there's absolutely nothing

like inferior about it. It is worth paying a couple extra hundred dollars to stick with it and to finish it, then to do it the quote unquote right way and not be able to stick with it as long. So the one that's better for you is the one you feel best about and honestly customizing it in the way that makes you feel even better about it. Yeah, And then of course there's the additional questions of well, what else should I be doing with my money? Is it better to pay off the debt or save or invest

or fill in the blank. And we've answered that in a previous podcast, episode two, which you can feel free to head back to episode one seventy one. What should you focus on in debt pay off. But just to cover that briefly because it's also mentioned in this article. Specifically, they're asking the question, is it better to put money in savings or pay off debt? I think they're using the term savings interchangeably with investing. We know they're two

different things. But of course paying off debt versus just dashing money away not making any level of interest. Paying off debt's going to be far better. But if we're talking about investing that money, you're putting it into a high yield savings account, you want to look at percentage rates of the interest rates, right, what are you earning on that money versus what are you going to owe

an interest? And so certainly it can be worthwhile to consider investing, especially investing for retirement congruent to in alongside paying off debt, especially when our debt interest the interest rate on the debt is lower than what we're earning on interest in those investment accounts. So certainly we're again it's going to be up to you as an individual

for what feels good for you. But if you're an average income earner, you really are going to want to consider investing as early as possible that's just our little, our little hot take, not that hope to take. I'm just make your make up your own mind. But but then of course it's worth saying with savings, yes, have an emergency fund, so in alongside paying off debt, we do want to have some money stashed away for medical or other emergencies as they rise, So don't leave yourself

high and dry. So a few things to consider their retirement emergency savings alongside debt payoff. Yeah, especially with the example they've given in the article of the two of their loans are under five percent. We've got a three percent and a four and a half percent, and that is really good. That is way less than what you'll

get over time in the stock market. If we're looking at like a thirty year horizon, whereas eighteen point nine, you would be i mean expert pro to get that in the stock market for a thirty year time horizon. So like you're not gonna probably not going to make that up by investing. So getting rid of that is a great idea, but it's not as important, I mean

the three percent interest rate. In the four and a half percent interest rate, you don't have to be as on Firebaut and we'll we'll talk about that in the next article. So I don't want to get ahead of myself. Alright, So our next article is called things to consider when prioritizing which debts to pay off first? Did you learn anything new in this one, Shill? I don't. I can't say anything new stood out to me. You just know

it was affirming. I think I think we talked about this well a lot more recently in saying debt is neutral, Debt can be a tool and a resource. We are not of the mindset that debt is evil and it's going to ruin you and you're unwise to have ever

gotten into debt. We're not going to say that. And so I think this is really helpful to recognize, okay, and especially for our debts that have very low interest rates on them, it's okay to ride out the length of that loan, especially if it means it gives us more wiggle room to be investing and saving investing for our future, recognizing retirement hopefully can come for us, that we don't have to go hot and heavy at these

loans that are only two to three percent interest. So and yeah, I'm going to talk more about that, but I think just affirming it's always good to hear this more kind of radical middle approach when it comes to, hey, what should I be doing, what should I be prioritizing or considering when it comes to debt payoff and when we eliminate the shame? I love that. Yeah. So there afore different questions to ask or things to consider when you are trying to customize the debt avalanche or the

debt snowball. So the first one is tax breaks, and I don't think I would put this as the first one, but they have. So they state that tax breaks can come in the form of credits, reductions, or exemptions. Certain loans, like mortgages and student loans, do have tax deductions that allow you to reduce your taxable income, but this is

slightly misleading. Mortgage interest can only be deducted if you are itemizing deductions, which most of our listeners are taking the standard deductions, So that's not really a thing when you're thinking about paying off your mortgage. Don't consider the tax implications or a tax break when you are paying that off. It's if you're taking the standard deduction like most people. UH, student loan and on the other hand,

is deductible. If you take the standard deduction, it's considered a income reduction, so you would reduce it just like if you were UM contributing to a health savings account or for ohwe K. Those are things that are considered UM off the top income reductions that then will reduce your taxable income. So student loan interest when it was occurring was deductible. If you see any student loan interest,

it will be deductible as as income. So so that is a small thing to consider, and I would say mostly if you're on the teetering on the edge of an income bracket, that's maybe more important. Or if you're in a highly taxed area highly taxed income, maybe those are things you want to keep around. But if you are not, then it's really not something I would consider. That's not the definitely not at the top of my list when making considerations on what debt to pay off.

And the second consideration that should have been the first consideration, and you've already heard us talk about it interest rates. So here you go. Here's like a really simple template. Prioritize anything in the double digits immediately. Yeah, of course, reference back to whatever your preferences. Avalanche or snowball. We just love snow I guess those are intense snow We

don't illustrations though, Yeah, avalanche or snowball, both of them are. Anyhow, anything between five and nine percent is going to be secondary, so the next thing that you want to be tackling. And then they say anything under five percent is at

your discretion. This is very low interest and again most likely your money is going to go further invested when the tip goal average return is seven percent and you know, yeah average anything under five percent then yeah, take your time, live out the life of that loan if you want, again at your discretion. Yeah, and these are just standards.

So again, these are just recommendations that we are making because of kind of psychology of you know, the psychology of motivation, psychology of simplicity, but also math, you know, like when we are sitting with loans in the double digits, that's eating up any return that we could get in this in the stock market. Uh so that's really important,

I think. And typically what we see is credit cards have lower balances anyway than like a car or student loan, so it usually just ends up that they're at the top of the snoble and the top of the APO lanch.

Normally that's what you're going to see. If for some reason you're not seeing that, I would definitely say prioritize the double digits first, and traditional, like for the last twenty years, wisdom is to uh, if you're not going to pay off everything, just pay off everything over five percent, because the minimum kind of you're going to get long term in the stock market has shown to be about

seven percent. It's usually between seven and ten percent is what we usually plan to earn, and so anything under five percent is really at your discretion. But we're in a season where interest rates are so high that may not be feasible right now. It used to be very easy to get a car loan under five percent, like all car loans were under five and now it is

very difficult even if you have excellent credit. So that's why, like we're saying, anything five to nine percent is secondary, because you want to make sure you are maintaining your emergency fund so that you don't have a reason to go back into double digit interest rate debt, and that you're also starting to incorporate some investing that you're you're still if you were able to invest, and maybe a new interest loan is keeping like trying to pay off

that will keep you from investing. Try to stay at the status quo where you were, and just secondarily try to incorporate that debt that's between five and nine. But it's really up to you. That's just like a recommendation

from your frugal friends and this article. Yeah, so next is to consider the remaining balance, and that would have been my second suggestion, is to consider the remaining balance because like we said before, there is a science to simplicity and it will not just give you a sense of accomplishment and a sense of motivation, but there is an overwhelm that comes when our lives are cluttered, uh

scheduled to the brim. Our transactions list is a mile long, like there is an element of stress that comes with that, and it's the same with our debts. The more debts you have and the higher than the amount, but even just the individual debts causes more stress and anxiety. So if that is something that you are seeing, then definitely maybe starting with a snowball and then progressing to an

avalanche might be what works for you. Alternatively, when we interviewed a cup for our Debt Free Stories UH series on YouTube. We found that they prioritized the higher minimum payments, so they didn't look at interest rate as much. Well, they did look at interest rate, they didn't look at amount, but they did focus on I don't forget this if this is a Coupler or one of the other girls.

I don't remember who did it actually, but they focused on the monthly payment and focused on the higher monthly payment so that they could get that out of their life quicker. So once they paid that off, then they had this huge amount to add to their margin. And and so that was and that normally will probably end up being probably your largest interest rate. I'm not sure.

I don't know where it would end up being actually, but it was super mobid avating to free up that entire chunk of minimum payment every single time, way more than it had just been a small like twenty or fifty dollar addition to the margin. I think that's what you're here too. When people say people make it a priority to pay off their mortgage, it's not just an interest rate decision. It's also that freedom of no longer having a mortgage, freeing up What is usually a big

portion of where their monthly expenses are going. And so yeah, similarly, if you've got a payment that is taking up a good chunk of your take home pay, then you're gonna experience a good deal of freedom when now you've got that four hundred five hundred dollars not obligated to be paying every month, and you can kind of put it where you want to, whether that's towards more debt or

just living large. Yeah, this is definitely I think the interest rates and how you feel about the remaining balances, those are the two biggest things for me. Yeah, what's going to keep you on quartermize what you know about yourself already. The last one that they mentioned on here to be considering in determining prioritizing debts to pay off. This one's an interesting one to me. It's probably also important. Probably also should have considered this one. Yeah, it says

the consequences of default. Now this is interesting to me because we're talking about paying off debt, not not paying debt, So like, considering the consequences of default is considering the consequences of you not paying the debt, which is not what we're talking about. We're talking about increasing payments towards

debt and which one is most important. They're kind of referencing like if you did and pay your mortgage after a little bit of time, you're gonna get kicked out of your house, or if you don't pay child support, you could go to jail. But it's like, that's not what we're talking about. But yeah, okay, so look at which debts are important for you, kind of maintaining some semblance of like being a contributing member of society and having a roof over your head. But obviously we're talking

about paying off the debt, not ignoring the debts. So I don't I don't actually know how important that is to be picking about are on the line, if you are going through a season, or are are working on getting a new job or getting a job. I think this is something to consider if you are not looking at how should I spend the margin, like to pay off debt faster. If I'm just looking to stay stable and just pay debt any on anything than then yes,

this is a way to consider. But if you are, if you are budgeting and your budget shows that you should have margin, extra margin to play with to pay off debt, then don't. This isn't where we should be looking. We should be looking at interest rates and balances and kind of creating a plan based on those. Yeah, the consequences of default. I think that's more so like a

budgeting technique. And if money is really really tight, what are you going to prioritize, Like you're gonna pay your rent, you're gonna pay your bills, and you're gonna buy some food. Like that's where that's gonna go. I would say definitely more of a budgeting technique than a debt payoff strategy consideration. But you know what falls under all categories, always, everywhere, all of the time. First priority, after the first part

of the show, the Bill of the week. That's right, it's time for the best minute of your entire week. Maybe a baby was born and his name is William. Maybe you've paid off your mortgage, maybe your car died and you're happy to not have to pay that bill anymore. That bills, Buffalo bills, Bill Clinton. This is the bill of the week. Hey, this is Nick, long time listener. I had listened to every single one of y'all's episodes. Thank you very much for what you do for our community.

Y'all are amazing. My bill of the week is the mental tax and exhaustion from being an introvert trying to network. Listening to your most recent episode when I'm recording this and hearing just go out and do it. It's not that bad for introverts to network. Just throwing it out there as my bill. It is extremely taxing and exhausting. Just had to recently do this at a couple of work professional conferences and it took days to recover. So thank you guys again for what you do. And God

bless Nick. You've lived listened to every single one of our episodes, every single single one. I mean, that's amazing. I'm not saying yeah, I'm not saying you're not telling the truth. Jill hasn't even listened to all of our episodes. Yeah, probably, I don't even know if I was here for all of them. But also, great point, what a great bill. That is also a great point about the mental task and exhaustion. Yes, I had to come to terms with

this as well. And if you don't know what he's talking about, Nick talking about our episode with Mandy Woodroff Santos where she talks about increasing your income by getting better jobs, getting promotions, by becoming poach all essentially so, and the way you become quote unquote poachable is by networking and meeting new people that could quote unquote poach you and get you um that could hire you for a better position or higher paying position, etcetera. And the

idea of networking at like big networking events. As an introvert, yes, I am totally against it. I when I go to conferences, even the conferences where like I know people and feel comfortable are still quite overwhelming. But it's the places like so my friend joined um like a softball league at her school, and she got to know like teachers and

other grades through that softball league. And she did not enjoy the softball aspect, but it was a great way to meet people in her field that she would have

otherwise not probably not gotten to know as well. Or doing small social gatherings if there are any small groups like professional group outings like my old job used to have a book club, and so not necessarily joining because I love books, though I do, but joining because it's a way to meet people on a smaller level, have a reason to talk, have something to talk about stuff like that, So like not just thinking about social events and stuff at face value, thinking like oh I don't

I wouldn't enjoy doing that, so why would I go, but thinking about them as ways to network with people that are better than bigger actual networking events. So for any introverts out there that are scared of networking, I see you, I get you. Try these smaller social outings that maybe you would have otherwise not thought about, but could be great for networking because of their small size.

If you out there listening or an in revert or an extrovert, you've got a bill for us, or if you've got a bone to pick with us about some networking advice we've given and how difficult it is for you, or if you know you've just got a bill of some other sort, we're here for it. Frugal Friends Podcast, dot com, slash bill, leave us your bill. We're here to provide all of the support after you've tried implementing on these tips and tricks. And now it's time for

the lightning round, all right. In today's lightning round, we've been talking about debt payoff order and what the standards are, how to customize it, and in this lightning round, we are going to talk about how we personally paid off our debt, like what was the strategy and how we decided to prioritize it. I remember mine vividly because I remember when we started. I was told I needed to do the debt snowball. So I said, that is the way we will do it, because that is the way

we were told to do it. And why would you deviate from it if you were told to do it that way? And I know nothing, and this person, you know, seemingly knows everything, So why would I listen to myself or to this was a different me, Jill, different me. It's crazy the ways that you will compromise yourself when you are in fear or overwhether So that's yeah, that's a good note. Um and Travis when I said this, was like, M, I don't think that that is the

smartest way to do it. And I was very reluctant to listen to him because I was like, MM, I don't trust you. I don't I just married you. I don't trust you. I don't know you like that, and this person seems to be smarter than you, And I have said, well, if I want to be married to this person for more than three months, I should compromise. This will be our first compromise. It'll be okay, and when I prove him wrong, it'll be even better. And

so we decided. I paid off my car loan, which is actually the smallest loan before we got married, so it doesn't really count. But so we decided to start with my student loan, even though it was our largest loan. It was like fifty something fifty grand, and it had little loans within it, how about six of them, I think, And so we started with that because it was six and a half percent interest, and then went to Travis's student loans, which was about twenty four grand, because his

were mostly between three and four percent. They were all federal and they all had a different interest rate, which was interesting. Mine was grad student loans, so I guess that's why they were all the same. So we went pretty much avalanche, and within my student loan, we chose to go snowball within though that like bigger student loan, just to clear them out and to get that sense of satisfaction because they were all the same interest rate,

so it didn't matter. So we were like, well we might as well, do the snowball within it, and uh low and behold, we did pay off the debt. We got it paid off. And not going in the order I was told to go in turned out to be absolutely fine. Didn't deter us. Doing the snowball within the bigger student loan was super helpful. But nobody like struck us with lightning for doing these because they didn't know where you were. That's probably true, and I've I've given

too much away on the show. And if I were to try it again, who does what would happen? I took an approach that we didn't talk about yet called the whack them all approach, where one I love to hear anyone and I was just trying to whack them and forget about him. It was a lot of you know that. I loved the arm like movements that went along with it. That just like the whack a mole. But if she had like two whackers. I love how much you remembered, Jen. I don't know what it is.

I guess I just I don't have a great memory or a block out things that I perceived to be traumatizing. I couldn't I hold on to try to like right, I remember, I don't know like the exact interest rates of each of the different loans, like I can remember how they happened. But if you've heard some of my story already, this is Jill, then you know that Eric and I took out loans in the process of debt payment.

That's a lesser known thing. And certainly if they knew where I was, they would have struck me with lightning far before they were trying to strike you. Jen. It was intentional protected. It was eyes wide open. It's like that you don't have to outrun the bear, you just sound to outrun your friend. Well, Jill, that's why we have so many friends, That's why that happened. There's always someone doing worse so so, but eyes wide open, and I don't regret the decision that we made. They were

business decisions. They were future decisions that ended up setting us up to a point where I could begin pay off my grad school like cash flow my my grad degree. So that's all great and awesome, but it's like it it's kind of complicated for me to describe what I did, because yes, I started paying off my student loans, but then in the midst of that, we took on a truck loan. We ended up paying off the truck loan before I was done with my student loans. So there

it was just a whack them all approach. One one popped up. We knew it was popping up. It wasn't you know. The illustration breaks down somewhere, But that's how we tackled that one. Follow me for more tips, well, I mean it also it aligns kind of like a few episodes ago and we had the bill of the week where Stephanie put fifty dollars on her credit card to buy a course that would help her start a side hustle that has made her like sixteen hundred times

the investment, Like sometimes you are in debt. Sometimes you knowingly take on debt for the betterment of the season, and so their debt is neutral and when you go into it, and this is what trips so many people up. And I've I feel so sad to see so many good people feel like idiots because they took out student loan debt. Like because you took out debt, took out a loan to get an education when you were eighteen, Like nobody would have given you a car loan for

a tesla at eighteen. Nobody would have given you a business loan at eighteen. There are so many loans that you would not have been approved for you you were approved for student loan. And it is not the fault of of eighteen year olds who are not educated in the nuances of finance. There is no guilt and there is no shame in debt, especially when that debt can help you better your life. And so the question is not whether is debt bad or good? Should you have

debt should you not? It's what is it doing for you now? What it did for you then that was then what's it doing for you now? And if if what it did for you then has helped you now, we thank the debt. We say thank you debt, thank you, thank you a loane. And now if it's holding you back from moving forward, we say bye, goodbye debt. We gotta get rid of you so we can do other things moving forward. But ultimately there is no shame in

actually having the debt. And and it's it's just a sad add like thing to see people feel so oppressed. I mean, I get it. It's it can feel very overwhelming, But then that doesn't need to move to in action. It can help us identify, well, then what's going to bring relief, what's going to bring peace to me? And yeah, thank you for the thing you bought me, right, debt doesn't exist for no reason, like what did it buy you?

How can you value that thing? And then say, I've got other plans for my money now, so we're gonna we're gonna get rid of you. And then identify what's going to be the most logical and mentally an emotionally

helpful way for you to tackle that debt. So we hope that this has been helpful if you were kind of uncertain about the different methods of the avalanche, the snowball, what's best for you, how to even identify ways to tackle But at the end of the day, we could also summarize by saying, just one foot in front of the other, maybe identify your approach, but it doesn't have

to be all at once. You could even potentially start in your debt payoff journey by identifying bills that you can lower expenses, you can get rid of, ways that you can save to prepare yourself to begin making extra payments. Just one foot in front of the other and we are here for you a freaking men. Thank you so

much for listening. We love, love, love reading your kind reviews that in you know, kind of remind us that our best episodes are not a hundred behind us, that you know, we're still providing value, and so we wanted to share this one from Sadie Marines is practical and relatable insights, and she says, I love this podcast. The host give practical and really double insights and advice. Listening each week also Kiso motivated to keep my financial goals.

Thanks for the great listening. That's so kind, Sadie, so to the point, helpful, encouraging, appreciate you. Yes, thank you, Sadie, and uh, thank you. If you enjoyed the show, please take a minute to leave a rating and review. It helps potential new listeners know what our show is all

about because we're not always for everyone. I think some people look for a frugal living podcast and they're looking for just money saving tips, and then other people are looking for a podcast that's not hosted by women who chat and laugh together. And it's helpful to let people know what they're getting themselves into with a review from you. So if you like it, let them know and in

the meantime, we'll see you next time. Frugal Friends is produced by Eric Syrian so Jen it's January when this releases. We're recording it in December. I'm currently at podfast No, not this one. I'm currently not so right now, I'm prepping for January. January in my mind. We talked about this when we went to Sam's Club together before my membership expired. But um, I love that final trip to sam Club we took and all the free samples we can.

I'm in the midst of, well, I'm preparing for what I imagine will be a low spend January for multiple

converging reasons of life circumstances. But we have talked about I am like making now right now in December, like some purchases to prepare myself for January to like not be spending much money at all, And not much of that has to do with the fact that it's the holidays, just where renovations are and life circumstances, and like when you told me so, when you were like, I'm preparing for this and you told me what you were calling it, I was like, what, And then you explained it, and

I was like, oh my gosh, me too. And it has nothing to do with holiday spending. Again, it is our renovations and where we are in life. Yeah, it's that final push of renovations, but before we can see like the so for both of us doing these, getting these short term or mid term, what is yours going to be? Even all over the place long term more long terms and mid term term minds a short term rental years and true, yeah we're not able to yet rent it, but it's the final push before we can

get it rented. And so it's a lot of money going out but not that money coming in yet. And so I'm prepping one of the things on my list to buy in December, to be prepared to like not spend money on like you know, the more like luxury frivolous items is definitely a bottle of gin. I'm not gonna lie. I'm like, I can't, I mean not, I can't. I do not want to do January without an ability to make myself a gin and tomic. I respect that so much. You know what is going to sound even worse.

I am what twenty five weeks pregnant now, and when this airs I will be you know, twenty nine or something. I don't know. And I was at a White Elephant gift exchange and I picked up this really nice bottle of bourbon and I was like, oh my god, yes, I can save this for March. I'm so excited. And then somebody stole it from me and I was like, oh man, I was gonna save this and I was so sad, so like, I get it, but I would have also had to look at that bottle for three months,

so maybe it's for the best. What kind was that? What's your go to? It was, well, it's not my go to, that's the brand, So yeah, I too wasn't at that moment. I was like, I don't think. When it was stolen from me, I was like, how am I going to get through the last three months without that bottle of bourbon? I was, I have such big plans for it come March sixteen. H m hm. So I get it. Our priorities are Yeah, that's that's us. Well, see you in March.