The fastest way to pay off your debt

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• 💵  The fastest way to pay off your debt

• 😂 Meme of the day

BADA BOOM! Last week, we shared another 7-question quiz to test your knowledge about "money". We had over 60 responses but Reece was the first to get all correct! (these were tough only 1 other person got them all right)

We're going to drop another "money" quiz this Thursday... 👀 So make sure to read the emails so you can win the $10 💰️

YOU KNOW WHAT THEY SAY, “SAVING MONEY IS MAKING MONEY”

In today’s newsletter, I want to do something a little different.

I’m always talking about businesses and side hustles that make you money but I rarely talk about the other side of the coin: how to save money. Why? Well, because making money is way more fun!

But that doesn’t mean saving money isn’t important, because it is. If you think about it, the more you’re able to save, the more you’re actually taking home.

And that’s why today I’ve got a company that is striving to be the tool you always wish you had - properly managing your debts and helping you save money in the process.

It’s no secret that consumer debt is at an all time-high. In the past year it’s grown to over $1 Trillion (that wasn’t a typo…Trillion!)

I’ve gotten multiple questions and responses around debt. How do I get out of debt? What’s the fastest way for getting rid of my debt? 

There’s really two solutions to choose from:

1. The snowball method

2. The avalanche method

What’s the difference?
Remember when you were little and building a snowman you always started with one little snowball and worked your way up to a huge one as you kept rolling? That’s the snowball method. You pay off your smallest debts first then move on to the bigger ones.

Mathematically, this is not the fastest way to get rid of debt - the avalanche method is (aka attacking your debts with the highest interest rates first)

But there is one thing I didn’t tell you. There’s another solution. For all the people in the back with multiple credit cards, listen up.

There are companies, like Best Egg, that if approved, will go to all the credit card companies you have debts with and say “Put it on my tab.”

How does that help you?

Instead of you managing multiple credit cards every month all your debts get rolled into one monthly payment with one rate. And sometimes these companies can even help lower your interest rates, saving you money in interest payments. 

Best Egg, for example, has a credit card refinancing program that does just that.

All you have to do is:

1. Apply - you’ll find out if you’re approved within minutes

2. If you’re approved, browse your offers (like consolidating all your debt)

3. Select whether you want the lump sum (meaning you pay off the credit cards yourself) or Direct Pay (where Best Egg will pay off your credit cards for you with the approved funds)

So every month you’ll only put money towards one bill (not a handful) saving you time and most likely money (depending on what your new rate is). 

All this sounds pretty eggcellent to me.. how’s this for a debt eggucation? Okay, I’m done with the egg puns 😆

On a serious note, this can be a great idea if you’re having trouble paying off multiple credit cards. 

Companies like Best Egg even have personal loans that can help you cover expenses like medical bills or car/home repairs without leaving you to the money hungry hard lenders out there (who charge outrageous rates). 

Now it’s not guaranteed you’ll get a lower rate but it’s worth it to apply and see what you qualify for. These companies still have to make money so it won’t be a 0% interest rate but their goal is to give you another (hopefully better) option if you get approved.

To give you an idea of how much money these programs can save you, let's look at an example of how much you can save with lower rates. 

The average credit card debt right now is ~$8,000.

Let’s say you’re currently paying 22% (the average) on that $8k. If you put $200 towards it every month it would take you 6 years and 1 month to pay it off with $6,550 in total interest. Meaning in total you ended up paying ($8,000 + $6,550) $14,550.

Now let’s say you go to Best Egg or another company and are able to get a 2% lower rate.

Now it only takes you 5 years and 7 months (6 months less) to pay off and saves you $1,258 in interest ($6,550 - $5,292). This is the power of a lower interest rate.

A pretty big savings for doing something that only costs some initial origination fees. 

So that’s my rant on debt and action steps you can take to get rid of it. There any many options out there and I want you to be aware that they exist!

Let’s give a special thanks to Best Egg for sponsoring the email and as always, if you have questions or want me to dive deeper into something please respond to this email. I read all the replies. 

See you in the next one! 😊

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That's all I got for ya today folks!

DISCLAIMER: Best Egg loans are personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender or Blue Ridge Bank, N.A., Member FDIC, Equal Housing Lender. None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.