NEWS RELEASE
COLORADO TREASURERS OFFICE
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Today, during the fourth day of America Saves Week, Colorado Treasurer Dave Young speaks to Coloradans about paying down debt to be able to save.
“As you pay off your debt, you are freeing up money, allowing you to save it or spend it towards something else that’s important to you,” says Dave Young, Colorado State Treasurer. “You spend less on interest, save on late fees, all while lowering the debt balances themselves.”
Day Four: Paying Down Debt is Saving
You choose which method is right for you and your situation. Here is are two main ways to pay down debt:
1) The snowball method focuses on the balances of each loan. In this strategy, you make the minimum payment on all your loans except the one with the smallest balance. With this loan, you put as much money as you can toward it and when it is completely reduced you allocate that money to the next smallest balance. Your confidence gets a boost every time you see an account balance at zero.
2) The avalanche method focuses on the interest rates of each loan. In this strategy, you pay the minimum payment on all your loans except the one with the highest interest rate. You apply any remaining money you have for debt repayment to the highest interest rate loan. By paying off the debt with the highest interest rate first you reduce the overall amount of interest you must pay.
About America Saves Week
Since 2007, America Saves Week has been an annual call-to-action for everyday Americans to commit to saving successfully. Through the support of thousands of participating organizations, together we encourage our local communities to do a 'gut-check’ on their finances and saving behaviors. The America Saves pledge is the framework that allows savers to set a goal, and make a plan to achieve better financial stability.
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