What you will find is that each time you pay off a debt, the “snowball” gets larger. Continue this process until all debts are paid off.Take the amount you were paying towards the first debt and put towards the next smallest debt.Celebrate like crazy when you get that first debt paid off.Put every extra dollar you can find towards paying off that smallest debt.Pay the minimum payment on all of the debts – except the smallest one.Re-order these from smallest to largest debts (use Excel or Google Docs to make this simpler.).Next to each one write down the total balance owed.Create a list of all of your debts: credit cards, car loans, student loans, mortgages, etc….The Debt Snowball stepsĭepending on who you hear discussing this method it may be more or less steps, but this how I define the steps: And as you keep paying each off, you have more and more going to the next one and the momentum builds like a snowball rolling down a hill – hence the name. You just start with the smallest one and get it paid off ASAP.Īs soon as you do, you now have more to put towards the next smallest debt. Well, simply put it can be defined as a simple approach where you pay off the smallest debts first. So, if you are new to this method of paying down your debt you might have thought “what is a debt snowball anyway”? Since we are not robots that always do exactly what we know we should, I recommend this method for most people trying to pay off debt. The strength of using this method is that it focuses on the behavioral side of personal finance rather than the mathematical. If you are wanting to pay off debt on your own, this works!Īnd while Dave Ramsey popularized the Debt Snowball method, he didn’t actually create it. When Linda and I were paying off $46k of debt, we actually didn’t use a debt snowball spreadsheet or worksheet, but looking back I think it really could have helped us. 4 Money Habits To Start (that basically guarantee financial success)Ĭreating a debt snowball is my preferred method of getting out of debt.Our Honest Medi-Share Review after 14 years.We just checked off the biggest goal in our life.How I Broke Free From the Rat Race (in less than 2 years).How I made $2,145 Last Month by decluttering.How to get out of credit card debt (Free PDF).How to become a millionaire by turning $2k into $1 mil.4 Financial Lessons from Solomon: The Richest Man Ever.Why I took a Sabbatical YEAR (and how I did it).My Checklist To Financial Freedom (Free PDF). Why we began giving our age as a percentage.5 Bible Verses You Should Know (Free PDF).The Real Money Method (unbudgeting) course.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |