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Bye Debt, Bye

Updated: Aug 14, 2022

Creditors make money off consumers wanting to spend money they don’t have to buy things they don't need. If you are like me and already got debt, then here are some ways to pay that 💩 off.

The two methods I am most familiar with regarding debt payoffs are the debt snowball and the debt avalanche methods. The two debt pay-off strategies I used are described below:

Debt Snowball: paying off debt starting with the smallest balances.

Debt Avalanche: paying off debt starting with the highest interest rate.

I decided to use both debt pay-off methods. I started paying off my credit cards because they had the highest interest rate compared to my auto loan and student loans. Although I selected to pay off the credit cards first because of the high-interest rate, I began paying the credit card off with the lowest balance first. I had about six credit cards in my possession, which I started paying off one by one starting with the credit card with the smallest balance. I recall feeling accomplished and liberated each time I received a credit statement with a zero balance.

After all my credit cards ($12,000) were paid off, I proceeded to pay off my car loan ($10,000) because that had the next highest interest rate. After my car loan was paid off in full, I paid off my other loans ($10,000), which were the next highest balance. After my credit card, car loan, and personal debt was paid off, I proceeded to pay off my student loan balances. I am almost debt-free and have already begun investing and building my wealth. I am well on my way to a financially free future. I will be debt-free in 5 years and a millionaire in 15 years. It seems like a long time but it’s not.

My daughter will be graduating high school around the time I am a debt-free millionaire. I could pay my daughter’s college tuition and take her on a trip to Europe as a high school graduation gift. More importantly, I will be able to show her how to start and maintain her wealth. I am going to love the day that I look into her eyes after I tell her about the hard work, I did to be able to give her such a privileged life.

Also, these target dates are based on my current financial situation. As I make more income, which I will over the next 15 years, I will apply larger payments towards paying off my debt and invest more money into my retirement savings account, which builds my wealth faster. If I never stop investing, I will be wealthy and so will my family. I will discuss these debt pay-off strategies and how I implemented them in further detail.

While working on paying down my debt I decided to research the topic “credit” to better understand how it worked. In retrospect, I probably should have learned how credit works before running up a $32,000 balance, but I was trying to live a lifestyle I couldn’t afford. I also used credit to supplement the income I didn’t have to pay for things I didn’t need. But I was willing to do better and that is what mattered the most. So while researching I kept coming across the term APR.

In school, I remember learning about quadratic formulas or the Pythagorean Theorem but never how to calculate the annual percentage rate also referred to as APR. APR is the interest rate charged to a consumer when a credit card is used. Simply put, interest is the fee you pay for not having enough money.


If you lend me $50 for a year at 10% interest. I will owe you 50 + the 10% interest. $50 (original loan amount) x 10% (Interest charged) = 5. With $50 (original loan amount) + $5 (interest charge) = $55 is due back to the lender at the end of that year. That $50 I borrowed at the beginning of that year cost me $5 to borrow with an APR of 10%.

Learning how APR worked was a celebratory occasion. I celebrated by cutting up my credit cards into little pieces then using those pieces like confetti and tossing them in the air. I started reading my credit card statements showing APR starting at 24% which is $2,880 on a credit card balance of $12,000. I am paying $2,880 to borrow $12,000, and that is only if I pay that balance off in full within that year. That is absurd! If that balance is still there a year from now, and it certainly will be if I am only making the minimum payments, I will keep getting charged that $2,880 so in two years I would have paid $5,760 for $12,000. Learning how to calculate APR along with all of the other financial knowledge I gain help me get light years closer to financial independence.

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