1
00:00:07,380 --> 00:00:10,040
So… c-c-cold…

2
00:00:10,040 --> 00:00:12,600
Must keep moving…

3
00:00:12,600 --> 00:00:14,100
Hot cocoa?

4
00:00:14,100 --> 00:00:15,960
Ooh! Why, thank you.

5
00:00:15,960 --> 00:00:16,820
Wait a second…

6
00:00:16,820 --> 00:00:17,320
Ahh!

7
00:00:17,320 --> 00:00:18,700
Who are you?

8
00:00:18,700 --> 00:00:20,080
Wait, where am I?

9
00:00:20,080 --> 00:00:22,460
Hello, my tiny human friend!

10
00:00:22,460 --> 00:00:30,960
My name is Dave, and I am a Debt Yeti, and
you’re here in The Mountain of Debt!

11
00:00:31,620 --> 00:00:32,120
What?

12
00:00:32,120 --> 00:00:33,850
I don’t wanna be here!

13
00:00:33,850 --> 00:00:39,680
No one does, but as you know, consumer 
debt is a slippery slope.

14
00:00:39,680 --> 00:00:41,180
Debt can be painful.

15
00:00:41,180 --> 00:00:41,840
Ow…

16
00:00:41,840 --> 00:00:47,460
It’s stressful, it’s expensive and it limits the amount 
of money you can put toward other things.

17
00:00:47,460 --> 00:00:49,390
So how do I get outa here?

18
00:00:49,390 --> 00:00:50,739
Hey, chill.

19
00:00:50,739 --> 00:00:53,359
You simply have to choose a debt repayment strategy.

20
00:00:53,359 --> 00:00:54,359
Of course.

21
00:00:54,359 --> 00:00:56,439
But… I don’t know any.

22
00:00:56,439 --> 00:01:02,129
Start by making a list of all your debts—credit
card, medical, student loans—you name it.

23
00:01:02,129 --> 00:01:07,720
You’ll need to know the balance, the interest
rate and the minimum payment for each debt.

24
00:01:07,720 --> 00:01:11,142
Then you can choose from the following strategies:

25
00:01:11,142 --> 00:01:15,180
the Snowball method, the 
Avalanche method or Consolidation.

26
00:01:15,180 --> 00:01:16,180
Hmmm…

27
00:01:16,180 --> 00:01:18,060
The Snowball method is good for beginners.

28
00:01:18,060 --> 00:01:22,280
In it, you arrange your debts from smallest
balance to largest balance.

29
00:01:22,280 --> 00:01:26,240
Every month, set aside as much money 
as possible for debt repayment.

30
00:01:26,240 --> 00:01:31,410
Then, after making the minimum payment on
all your debts, the rest goes toward paying

31
00:01:31,410 --> 00:01:33,860
off the debt with the smallest balance.

32
00:01:33,860 --> 00:01:38,720
Paying off those smaller loans frees up more
money to put toward debt repayment.

33
00:01:38,720 --> 00:01:41,580
Like a snowball getting larger and larger!

34
00:01:41,580 --> 00:01:42,850
That’s right.

35
00:01:42,850 --> 00:01:46,700
Plus, the small victories can give you 
some much-needed motivation

36
00:01:46,700 --> 00:01:48,920
if you’re feeling completely overwhelmed.

37
00:01:48,920 --> 00:01:53,320
What if I’m not totally overwhelmed, 
but still have a lot of debt?

38
00:01:53,320 --> 00:01:58,210
The Avalanche method is, mathematically speaking,
the most powerful debt repayment strategy.

39
00:01:58,210 --> 00:02:02,770
In it, you arrange your debts by interest
rate, from highest to lowest.

40
00:02:02,770 --> 00:02:06,460
Every month, you make the minimum payment
on each, and the rest of the money you set

41
00:02:06,460 --> 00:02:10,890
aside for debt repayment goes toward the loan
with the highest interest rate.

42
00:02:10,890 --> 00:02:14,180
So you get rid of your most expensive debt first!

43
00:02:14,180 --> 00:02:15,180
Exactly!

44
00:02:15,180 --> 00:02:20,340
Now, sometimes that debt may also have a large
balance, so it might not feel like you’re

45
00:02:20,340 --> 00:02:24,400
making as much progress as in the Snowball
method, but if you can weather the storm,

46
00:02:24,400 --> 00:02:26,660
the Avalanche method is worth it.

47
00:02:26,660 --> 00:02:27,240
Nice.

48
00:02:27,240 --> 00:02:28,860
I mean… cool!

49
00:02:28,860 --> 00:02:30,920
Then there’s Consolidation.

50
00:02:30,930 --> 00:02:34,659
This can be a helpful strategy if you’re
having trouble keeping track of all your various

51
00:02:34,659 --> 00:02:36,260
debts and their payment dates.

52
00:02:36,260 --> 00:02:40,349
When you consolidate your loans, you take
out a new loan and use the borrowed money

53
00:02:40,349 --> 00:02:42,590
to pay off all your other debts.

54
00:02:42,590 --> 00:02:47,400
You are then left with only one loan—and
therefore only one interest rate and

55
00:02:47,400 --> 00:02:49,420
one payment date—to worry about.

56
00:02:49,430 --> 00:02:51,180
I do like the sound of that…

57
00:02:51,180 --> 00:02:54,480
You still have to do your research 
and make sure it’s right for you.

58
00:02:54,480 --> 00:02:59,920
The new loan may have additional fees or a higher interest rate than your current combined debts.

59
00:02:59,920 --> 00:03:04,060
Your credit union can give you more information
on the loan options available to you.

60
00:03:04,060 --> 00:03:07,360
Snowball, Avalanche and Consolidation…

61
00:03:07,360 --> 00:03:12,120
Those are some helpful strategies, Dave, but
I was hoping for something a little more…

62
00:03:12,120 --> 00:03:13,120
immediate?

63
00:03:13,120 --> 00:03:13,920
I see.

64
00:03:13,920 --> 00:03:16,340
Well, how about the Sled Strategy?

65
00:03:16,340 --> 00:03:18,720
The only thing you need for this one is your balance.

66
00:03:18,720 --> 00:03:20,160
You mean for my loans?

67
00:03:20,160 --> 00:03:20,700
Or just…