Paying Off Debt

by Ann Marie Damashek, GRI, CBR, SRES 09/29/2019

Like most Americans, you probably carry some debt. Reaching your dreams such as saving for a down payment or registering for a class takes longer when you're also paying on money you owe. Paying it off might seem daunting when the only way you know is to either make more money or reduce expenses. There are other ways, though, to tackle debt. Here are three.

The avalanche

When using the avalanche method to pay off debt, organize debt by the highest interest rate to the lowest. Any extra funds you can come up with go toward the debt with the highest interest rate until it is paid off. Then, move to the debt with the next highest interest rate. Take the whole payment amount of the first debt and add it to the payment of the second highest debt, paying it much more quickly. As each debt is paid, move to the next highest interest rate until all debt is paid. Proponents of this method believe your debt is paid off faster with the least amount of interest paid.

The Snowball

This popular method to pay off debt focuses on paying off the smallest debts first, then taking that payment and adding it to the payment for the next lowest debt. As you pay each debt, add that payment amount to the next smallest debt's payment. Each time you pay off one debt, the amount you can throw at the subsequent debt increases in the same way a snowball rolling down a hill gets bigger and bigger. Eventually, you can apply the final amount to your last debt and pay it off more quickly. Champions of this method believe paying off smaller debts first provides a psychological boost, encouraging you to stay on track.

The snowflake

Both the avalanche method and the snowball method rely on your coming up with some extra cash in your monthly budget to throw at the first debt. But what if your budget is so tight that you can't add a regular amount to your monthly outgo? The snowflake method is different. Always pay minimums on all your debts, but whenever you have random cash, apply the extra to the smallest bill. So, if you sell something online or if a friend pays you back for dinner from a month ago, apply that extra to your smallest debt. Use birthday money, the five dollars you found in a coat pocket, or your tax refund to pay toward debt. Even though you’re not adding a regular amount to your debt payment, you can still reduce the balance and pay off your debt more quickly than by just making payments.

Reach your dreams

Once you’ve paid off your debt, continue to pay the final payment amount into a savings account toward a down payment or some other goal.

Credit Card Debt

Budgeting

Personal Finance

About the Author

Ann Marie Damashek, GRI, CBR, SRES

Ann Marie Damashek has always been a natural at helping people prepare their homes for sale. She started out with a successful business selling goods for people on eBay. "Nine times out of ten they were hiring me because they were down-sizing,” Ann Marie says. "So I decided to get my license. I said, ‘Might as well sell their house too.’” The transition was a smooth one and for nine years she’s had a thriving full-time real estate business that allows her to marry her entrepreneurial spirit with her passion for helping others. With an office in Larchmont, New York, she serves all of Lower Westchester County, with her primary market in the Sound Shore region. The majority of her business is "sphere of influence” with former clients referring her to friends and family. A gifted communicator, Ann Marie quickly builds trust and rapport with her clients by being both thoughtful and responsive; she understands that during the purchase or sale of a home, a quick response time is crucial. "I am very accessible,” Ann Marie says. "I always make time for my clients. They can call me, text me, email me up until 10 o’clock at night and I will respond. I’m available on weekends. I get back to people very promptly. I’m very customer service-oriented.” Her clients appreciate her professionalism, passion and enthusiasm and as a result her repeat and referral rate continues to grow each year. While selling real estate is serious business, Ann Marie knows that at times humor and a moment of levity can be a relief to clients. While she has a laidback and easygoing personality, she can be assertive when needed on her clients’ behalf. She loves being of service to them, and the continually changing nature of the work keeps her engaged and fulfilled. "It’s never boring,” Ann Marie enthuses. "Every day is different. That’s probably what I like most about it. But I also enjoy helping people sell or buy and educating them about the process. I love helping them achieve their goals.” This ethic of service has resulted in well-deserved recognition. Ann Marie has received the Westchester Magazine Five Star Real Estate Agent Rating four years running, in 2015 and 2016 she was the #1 agent in her office, and she’s a Zillow 5-Star Premier Agent. To keep in touch with former clients, Ann Marie sends cards to mark special occasions or reaches out via email. To market her listings, Ann Marie uses Multiple Listing Services (MLS), as well as Listingbook.com, a service that allows both agents and their clients access to MLS data. She also uses a Facebook business page and ads to boost new listings or promote upcoming open houses. "That drives a tremendous amount of traffic,” Ann Marie says. She also uses the most popular real estate websites such as Zillow and Trulia. A strong believer in giving back, Ann Marie sits on the Board of Trustees of her church and is involved in a variety of social justice projects. She’s affiliated with Furniture Sharehouse, a furniture bank for Westchester County, which collects and distributes gently used furniture free of charge to those in need. "I love it on so many levels because as a realtor, it’s helps my sellers downsize through charitable donations. I like the environmental aspect of it as well. And it helps people who truly need things.” She’s also involved in Impact 100, a women’s philanthropic giving organization. In her free time, Ann Marie enjoys gardening, traveling, and spending time with family and friends. For the future, Ann Marie wants to continue expanding her business and developing her brand, and she someday hopes to grow a strong team. But her main goal is to stay in the real estate business, helping her clients to achieve their dreams.