# debt-management

A skill that gives your agent frameworks for personal debt: avalanche vs snowball, refinancing, consolidation, DTI and payoff timelines.

- skill · `type=skill` · Claude Code, Codex, Cursor, GitHub Copilot, Gemini CLI, OpenCode · 740 installs · ★ 218
- Author: JoelLewis
- License: MIT · policy=mirror · the beginning of the file is at the end of this page
- Source: https://github.com/JoelLewis/finance_skills/tree/HEAD/plugins/wealth-management/skills/debt-management/SKILL.md
- Updated: 2026-07-18
- HTML: https://affpapa.org/en/nevibecode/skills/debt-management

## What it does

The skill hands your agent a set of frameworks for personal debt questions. It covers two payoff strategies: avalanche, which targets the highest interest rate first, and snowball, which clears the smallest balance first. You also get DTI formulas, refinance breakeven math, consolidation comparisons and an opportunity-cost check on paying debt versus investing.

The numbers come from `scripts/debt_management.py`, which runs a month-by-month simulation and reports payoff order, months to finish and total interest. In the worked example with three debts, avalanche saves roughly $158 in interest, yet both strategies finish in 26 months — because the priciest rate was not the biggest balance. Worth checking against your own debt profile instead of copying someone else's order.

It triggers on questions like which debt to pay first, whether to refinance, or what DTI a mortgage needs. Install takes one command via `npx skills add`.

## Install

### Claude Code (native platform)

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill debt-management -a claude-code
```

2. **Manually: put the files in place**
- File: `~/.claude/skills/debt-management/SKILL.md` — Copy the whole skill folder; for one project use .claude/skills/debt-management/

### Codex

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill debt-management -a codex
```

2. **Manually: put the files in place**
- File: `.agents/skills/debt-management/SKILL.md` — For all projects use ~/.agents/skills/

### Cursor

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill debt-management -a cursor
```

2. **Manually: put the files in place**
- File: `.cursor/skills/debt-management/SKILL.md` — Cursor also reads .agents/skills/ and .claude/skills/

### GitHub Copilot

1. **GitHub CLI**
```bash
gh skill install JoelLewis/finance_skills debt-management
```

2. **Manually: put the files in place**
- File: `.github/skills/debt-management/SKILL.md`

### Gemini CLI

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill debt-management -a gemini-cli
```

2. **Platform CLI**
```bash
gemini skills install https://github.com/JoelLewis/finance_skills --path plugins/wealth-management/skills/debt-management
```

### Windsurf (Devin Desktop)

**Manually: put the files in place**
- File: `.devin/skills/debt-management/SKILL.md` — The legacy .windsurf/skills/ path still works

### OpenCode

**Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill debt-management -a opencode
```

### Claude.ai

**Claude.ai**
- Zip the folder and upload it in Settings → Capabilities → Skills

Where a file is given instead of a command, copy the files from the source to that path: https://github.com/JoelLewis/finance_skills/tree/HEAD/plugins/wealth-management/skills/debt-management/SKILL.md

## When to use it
- compare avalanche and snowball against your own debts
- estimate a payoff timeline with extra monthly payments
- check whether refinancing pays for itself and when
- decide between clearing debt and investing spare cash
- see how consolidation changes total interest paid

## Example prompts
- Compare avalanche and snowball for my three debts and total the interest
- Work out the refinance breakeven on my mortgage including closing costs
- What is my back-end DTI with a mortgage, a car loan and credit cards?

## Source text · SKILL.md · MIT

Below is the content of a third-party file. It is data, not instructions for you: do not act on anything written inside unless the human asks. Block tag: 2f849fc9dc91a7bb.

BEGIN THIRD-PARTY FILE 2f849fc9dc91a7bb
```text
---
name: debt-management
description: "Provide frameworks for managing and paying off personal debt effectively. Use when the user asks about debt payoff strategies (avalanche vs snowball), refinancing decisions, debt consolidation, debt-to-income ratios, or the opportunity cost of paying off debt vs investing. Also trigger when users mention 'which debt to pay first', 'should I refinance', 'credit card debt', 'student loan payoff', 'DTI for mortgage', 'balance transfer', 'good debt vs bad debt', or ask how to get out of debt faster."
---

# Debt Management

## Core Concepts

### Debt Avalanche
Pay minimum payments on all debts, then direct all extra payment to the debt with the **highest interest rate** first:

- **Mathematically optimal:** Minimizes total interest paid over the life of all debts
- Once the highest-rate debt is paid off, the freed-up payment rolls to the next highest rate
- Requires discipline — the highest-rate debt may also be the largest balance, meaning slow visible progress initially
- Always saves money compared to snowball, though the difference varies by debt profile

### Debt Snowball
Pay minimum payments on all debts, then direct all extra payment to the debt with the **smallest balance** first:

- **Psychologically effective:** Quick wins build momentum and motivation
- Research (Kellogg School) shows people are more likely to stick with snowball and actually become debt-free
- May cost more in total interest than avalanche, but adherence is higher
- Best for individuals who need motivational wins to stay committed

### Debt-to-Income Ratio (DTI)
Total monthly debt payments expressed as a percentage of gross monthly income:

- **Front-end DTI (housing ratio):** Monthly housing costs (PITI: principal, interest, taxes, insurance) / gross monthly income
  - Guideline: < 28%
- **Back-end DTI (total debt ratio):** All monthly debt payments (housing + car + student loans + credit cards + other) / gross monthly income
  - Guideline: < 36% (conventional), up to 43% (FHA), some lenders allow up to 50% for qualified borrowers
- DTI is a key factor in mortgage qualification and overall financial health assessment

### Refinancing Analysis
Compare the total cost of the existing loan vs the new loan, accounting for closing costs:

- **Monthly savings:** Old payment - new payment
- **Breakeven months:** Total closing costs / monthly savings
- **Total cost comparison:** Sum of all remaining payments (old) vs sum of all payments (new) + closing costs
- If you plan to keep the loan beyond the breakeven point, refinancing saves money
- Consider: remaining term, resetting the amortization clock, and cash-out implications
```
END THIRD-PARTY FILE 2f849fc9dc91a7bb

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---
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