I finally stopped paying minimums on everything and it made no sense

For like 2 years I was doing the Dave Ramsey thing, throwing extra cash at my smallest debt first. But I had a $4,200 credit card at 23% and a $1,800 car loan at 4%. Kept paying extra on the car loan and it felt good crossing it off. Then my sister ran the numbers for me last month and showed I paid $600 more in interest by not hitting that credit card first. I switched to the avalanche method and put an extra $300 toward the high interest card. Has anyone else made this math mistake and felt stupid after?

2 comments

2 Comments

christopherj631d ago

Wait your math's a little off. You said the car loan was $1,800, so paying that off early saved you maybe $40 total in interest, not $600. That extra $2,400 you could have thrown at the credit card would have saved like $50 a month in interest for those months instead. So the real mistake was way smaller than $600, like maybe $100 tops. Still worth switching to avalanche for sure, but don't beat yourself up over a tiny number.

mila_reed18h ago

Yeah but let me math shame myself in peace, Christopher. You're out here with your facts and logic while I'm trying to feel dramatic about my forty bucks. Honestly though, "you lost $36 in interest not $600" doesn't hit the same in a reddit vent post.

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