Financial Freedom

I like a lot of people this day and age how been trying to make sure that financial status is stable. Currently I have been trying to get myself out of medical, student loans, and personal debt. One major goal of mine for 2025 is to start getting a better grasp of my personal finances.

One of the first steps that I am taking is trying to understand and get a grasp on the debt that I have and get a payment plan down. I have done some research and from what I have saw there are two main ways of paying down the debt, now there is other methods but these are the two that I have the most confidence with. The snowball and the avalanche method.

The snowball method is paying of the smallest debt first and then applying that payment to the next smallest debt. For example if you have three debts and the minimum payments are 25,50, and 75 dollars. you would pay the 25 dollars until that debt is payed off then transfer the 25 dollars to the 50 dollar. That would mean you are paying 25 dollars extra on the second payment meaning it would be payed off faster. The snowballs are getting bigger are you work your way up to the next debt.

The avalanche method is paying the highest interest rate debt and has you focusing on that while paying the minimum payments on your other debts. Then applying that payment to the next highest interest rates once the first debt is payed off. Any extra money that you have to pay off towards debts you apply that towards your highest interest rate payment thus helping you pay less money in interest over time.

The method that I am planning to use is the avalanche one. While I do not think that either one is better then the other, however I do have a few loans that a high interest rates so I think that this is going to be the best methods for me to use. If I had loans that had similar interest rates I think that I would have used the snowball method. However I think that the avalanche is going to be the best in my current situation.

While I am going to heavy tackling my debt I want to also start saving. I currently do not have any savings, I have calculated my monthly expenses and that comes to about 3,720 a month to make it even. My end goal is to have about 3 months saved up for a emergency savings. I want to slowly work my way to having a month saved up then once that is done having up to 3.

After I get my debt somewhat under control and get at least a month of savings under my belt, I want to try to get into investing and try to develop some type of stock markets skills. That is farther down the line for me, once I am in a better place financially.

I am planning on completing every side quest I can to help build up my savings while my main paychecks go towards paying off my debt till I hit my one month goal before I throw everything that I make at paying off my debt.

By the end of the year my goal is to pay off one of my personal loans, which sits at 4,900. I would also like to pay off all of my medical debt which totals to 4,000. I am planning to document my journey here and on other platforms.