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Miami residents may wonder what the best debt-reduction strategy is to get yourself out of the red and into the black. The answer is that it depends a great deal on you and your motivations and goals. We’ll discuss the two most popular methods.

— The Snowball Method. One debt-reduction expert recommends this method, which involves paying the minimum on all of your monthly debts, with additional payments allocated toward to lowest debt balance. The theory behind why this works is instant gratification, which serves as motivation to continue paying down debts.

The problem with this is that usually the lowest balance doesn’t carry the lowest interest rate, which can result in less savings on interest over a period of time. But if this method contributes to positive changes in your spending patterns, it is definitely worth trying.

— The Avalanche Method. When paying off debt in this manner, allocate additional payments to the debt that carries the highest interest rate, which is usually credit card debt. Meanwhile, pay the minimum on all your other bills to avoid falling behind. You will eventually pay it completely off and can repeat the process with the next-highest interest rate.

Sometimes you can modify the plans by paying down the lowest balance debt first and switching to the Avalanche Method. During this time, it is also vital to make the necessary lifestyle adjustments to make sure that you are not running up additional bills or lines of credit. Your goal should always be to live within your means.

Sometimes, despite your best efforts at belt-tightening, you just aren’t bringing home enough income to cover all of your debts and living expenses. Then, it might be necessary to discuss filing for personal bankruptcy through Chapters 7 or 13.

Of course, it’s best to work with a financial advisor who can help you design a strategy that is comfortable and efficient for you.

Source: The Every Girl, “Which Strategy is Best to Reduce Your Debt?” Brittney Castro, CFP, accessed Feb. 06, 2015