WorksheetsDebt Snowball & Debt Avalanche
Total questions: 9
Worksheet time: 5mins
What is the first step in the debt snowball method?
Pay off the debt with the highest interest rate first
List debts from smallest to largest by dollar amount
List debts from highest to lowest interest rate
Make minimum payments on all debts
What is the main psychological benefit of the debt snowball method?
It saves more money in the long run
It focuses on high interest rates first
It is easier to manage
It provides small psychological wins
What is the primary difference between the debt snowball and debt avalanche methods?
The interest rates of the debts
The total amount of debt to be paid off
The minimum payments on the debts
The order in which debts are paid off
According to the debt avalanche method, how should debts be prioritized?
Randomly
From highest to lowest interest rate
From smallest to largest by dollar amount
From largest to smallest by dollar amount
What type of interest rate did the predatory credit card have in the example?
6%
19%
21%
4.7%
How much total interest was saved by using the debt avalanche method in the example?
$861
$1,200
$620
$359
What is the purpose of maintaining minimum payments on other debts while focusing on one?
To accumulate more debt
To avoid late fees
To increase credit score
To reduce the principal amount
Why is it important to have a written budget according to the video?
To track every dollar and know where it's going
To impress friends and family
To avoid paying taxes
To invest in the stock market
What does the debt snowball and avalanche methods aim to achieve?
Buying more assets
Being debt-free
Financial independence
Increase in debt
