Money Matters: Debt can feel like that giant monster under your bed that keeps getting scarier every time you look.

And trying to tackle it as a family? Well, you may as well try and get 3 toddlers dressed and to the photographer for holiday photos without any of them deciding to cover themselves in some myster liquid by the time you get there.

But no worries! Today we are back to give you the strategies needed to coast down your mountain of debt on auto-pilot!

Survey says: The average American family is carrying about $175,075 in debt (mortgage included), or $10,363 in credit cards, $37,274 in auto loans, and $55,777 in student debt. Yeesh, that’s a lot of future paychecks already spent!

Here is what on that portioned plate today:

😎 Our Favorite Resources
👍 Snowball vs. Avalanche: Which is right for YOUR family?
👌 How to get the WHOLE family on board (yes, even the teenagers)
🤷‍♀️ What’s up for next week

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Our favorite resources

💵Budgeting

As usual I want to give a shoutout to EveryDollar for building budgets. I have been using it for my family for 4 months and it continues to help us save money easily and stay on track.

👀ICYMI

Last week’s issue on healthcare budgets, click HERE

📜Quote

"The quickest way to double your money is to fold it in half and put it back in your pocket." — Will Rogers

Today’s Main Event

Snowball vs. Avalanche: Choose Your Weapon

Alright, let’s get down to business and talk about the two strategies to conquer debt mountain!

The Debt Snowball

What it is: List all of your debts from smallest balance to largest, regardless of interest rates. Then you throw every extra penny at the smallest debt while making minimum payments on everything else.

Once the smallest debt is paid, you roll all the money you were paying there into the next smallest debt.

Why it works: It’s all about getting a win as early as possible. Paying off debt feels great and each time you take something off your plate you are more likely to stay motivated and feel less stress.

This is huge for families and everyone can see the results quickly, especially if you have some extra cash here and there to celebrate those wins once accomplished.

The Debt Avalanche

What it is: List your debts from highest interest rate to lowest. Attack the highest interest rate debt first paying as much as possible, while making minimum payments on the rest.

Once the highest interest rate mountain is claimed, move on to the next highest interest rate debt.

Why it works: Mathematically, this saves you the most money over time. Since you’re eliminating your most expensive debt first, you pay the least amount of interest over time.

If you use any debt calculator to see how much interest you are wasting your money on over the life of a loan, and then look at how much money you’ll save if you pay off the debt early, you’ll be shocked and happy you went this route.

So you may be asking yourself…

Which one is the best?

How do I know what’s best for my family?

Well let’s start with what people seem to have the most success with. Then I’ll jump into how to choose.

A majority of studies found that people using the Snowball method were more likely to actually eliminate their debt completely, even though the Avalanche method saves more money on paper.

Why? Because humans aren’t calculators and we like to see our wins in order to stay motivated.

How to Choose

Consider Snowball if:

• Your family needs visible wins to stay motivated

• You have several small debts you could knock out quickly

• Your kids are younger and need to see progress to understand

• Your interest rates are all fairly similar anyway

Consider Avalanche if:

• Your family can delay gratification for bigger rewards

• You have one or two debts with significantly higher interest rates

• Your older kids/teens are involved and can understand the math

• You’re absolutely committed to saving every possible dollar

How To Get The Whole Family On Board

Alright, so you’ve picked your method…

Now comes the tricky part of getting the rest of the family to understand and buy into what you know is best for the future.

So here are some ideas to make debt payoff a family affair without anyone wanting to push you up the ski lift halfway up the mountain.

Make it Visual: Make a debt payoff chart and put that bad mamma jamma on the side of the fridge where everyone can see.

Create a picture of a mountain with your debts as boulders and, color each of them in as you pay them off. Giving you a nice visual.

A classic chart is also appropriate, which is the thermometer chart that is popular for fundraising communities. Just color is in as you pay off each debt.

Create the “WHY” That Matters to Everyone: Nobody get excited about paying off the Capital One credit card. But everyone can get excited about the Disney trip you’ll go on when you’re debt free!

Sit down as a family and decide on a meaningful reward that debt payoff will enable. Maybe it’s a vacation, a pool in the backyard, or just the freedom to take little trips whenever you want.

For younger kids a little goes a long way, they just want time and core memories with you. So when you pay something off have an ice cream party, or an epic movie marathon night. Don’t forget to live life along the way.

Give Everyone a Role: Nothing builds buy-in like having a part to play. Assign some age-appropriate roles to each family member:

• Little kids (5-8): Coloring in the progress charts, announcing the "debt update" at family meetings

• Tweens (9-12): Tracking expenses in a simple app, finding ways to save on groceries

• Teens (13+): Researching better interest rates, calculating payoff timelines, finding side hustles

• Adults: Leading by example, staying consistent, celebrating wins, avoiding new debt

Have Weekly Money Talks: Family financial meetings may sound about as appealing as getting a root canal over lunch and heading back to work.

So start by calling them something else like “Future Freedom Party” or something you find fun.

Keep them to 15-20 minutes (have some snacks because everyone likes snacks) and follow a simple format.

• Celebrate wins from the past week

• Update the visual tracker

• Share one way each family member helped the cause

• Decide on one specific action for the coming week

Celebrate the Small Stuff: Debt payoff is a marathon, not a sprint. Finding ways to celebrate along the way keeps everyone engaged.

Hit 25% of your goal? Have a special dinner. Paid off a credit card? Let the kids plan a free "fun day." Reached the halfway mark? Time for a small but meaningful reward.

Remember, the celebrations don't have to cost much – the point is acknowledging progress!

Real-Life Success Strategies

Now for some nitty-gritty tips to make your family debt strategy actually work:

Find Your Extra Cash: You need the right gear to conquer your debt mountain! The average family can usually find $200-300 per month by:

• Cutting the cord (saving $50-100/month)

• Meal planning to reduce food waste (saving $100/month)

• Negotiating bills (saving $40-80/month)

• Setting a "pause rule" for purchases over $50 (24-hour waiting period)

• Having each family member sacrifice one small luxury

Pro Tip: Instead of making the kids feel deprived, let them choose what to give up. They might surprise you with their willingness to help when given agency!

Deal With Setbacks as a Team The car will break down. The water heater will die. Kids will need braces. Life happens!

When a setback hits, treat it as a family problem-solving opportunity rather than a failure. Have a special emergency family meeting where everyone brainstorms solutions.

This teaches resilience and prevents the "why even try?" attitude that kills debt payoff plans.

Motivate Without Money: Finding ways to have fun without spending is critical to debt payoff success. Try:

• Family game nights

• Free community events

• Nature challenges (finding all the parks in your area)

• Skills swap (learning from each other)

• "No-Spend Weekends" where creativity rules

The kids might grumble at first, but they'll eventually discover that memorable family moments don't require opening your wallet.

Until Next Time

What’s Up Next Week

Final Thoughts: Whether you choose Snowball or Avalanche, the key is consistency and family buy-in. The method that gets your crew excited and involved is always the right one!

Remember that you're not just paying off debt – you're teaching your kids financial skills that will benefit them for life.

Check back in next week for a look at “How families can save on post high school education”.

Stay focused but live the life you have now!

Peace out,

Nico & the Hootsquad

DISCLAIMER: 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.