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~The Ultimate Debt Repayment System
THE DEBT SNOWBALL~
~How to use the Debt Snowball Method~
Being in debt is one of the worst situations you can be in. It takes a toll on a person’s life with all the sleepless nights, strained relationships, and being stressed out. Your feeling helpless, constantly trying to figure out how you are going to pay the bills, it never leaves your mind.
I’ve been there, it is not an easy road to dig yourself out of debt. Many people try to get out of debt, but life happens. They find themselves right back where they started.
If you are sick of being in debt and are committed to paying off your debt, then the debt snowball method is the way to go.
What is a Debt Snowball?
The Debt Snowball method of paying off debt is where you attack the debt with the lowest balance first by putting any extra money you can gather on that bill.
Once the bill with the lowest balance is paid, you stack the money you were paying on that bill to the minimum payment on the next lowest balance debt and so on.
What I like about the Snowball Debt method is that you see the results of your hard work faster than other methods. Just seeing that first debt finally paid off is so encouraging. It will show you that you CAN do it and it will help to keep you motivated until you are debt free!!
How to Set Up Your Debt Snowball
First you need to gather all your bills together. Then sort your bills in order of lowest balance first to highest balance last.
Next you need to find a method to track your debt and progress. You can do this on paper or create a spreadsheet, you can even make a nice visual graph to keep you motivated as you see your debt dwindle.
List your debt in order of lowest to highest. You also should record the minimum payment due monthly for each of your bill and the interest rate you are being charged for each bill.
After you have recorded your debt, you need to total the minimum monthly payments of all your debt.
Making the Debt Snowball Work for You
Now you are going to have to create or rework your budget. Your goal will be to look for ways to not only pay the total minimum payments, but to squeeze out any extra money to add as much as you can to your debt snowball.
You should look for ways to cut cost by meal planning, and saving money on groceries. Also, you will need to cut out any non-essential spending from your budget. This is not forever, but you need to do this to make paying off your debt a priority.
Keeping the Snowball Rolling
Once you have paid off your first and lowest balance debt. Take the all the money you were able to contribute to that debt and add it to the minimum balance you were paying on the second lowest balance debt. You will see how quickly it makes a dent. Keep this snowball rolling until all your debt is paid.
More Ways to Contribute
Other things you can do is earn a bit of extra money on the side to help maximize your debt snowball strategy. You can complete surveys, use money saving apps, sell stuff that you do not need.
Other options are create a blog, or start selling on Amazon or Ebay to bring in extra cash. This could even eventually earn a full-time income from these low-cost start-ups.
Snowflakes Can Really Add Up
One other way to contribute to your debt snowball is to add “snowflakes” to your debt. This would be any found money that may come your way. This could be in the form of cash gifts, income tax returns or employee bonuses. Basically any other cash that you were not expecting to get.
Over time, all the little snowflakes that you add to your debt repayment plan can really add up to quite a bit. And, every little bit will get you debt free that much faster!!
The key to the debt snowball is to contribute as much as you can to your debt. Once the first debt is gone, you will have that much more to throw at the next debt and so on.
Getting out of debt is not going to be easy, but with determination and a bit of work, you CAN do it. Once you see that first debt finally paid, you will get so encouraged. And you will prove to yourself that you can finally rid yourself of debt. You will want keep it up. The harder you work at it, the faster you will have the debt free life you deserve.
Please leave a comment if you have more ideas on how you have made the debt snowball method work for you and to encourage others.
Download my free eBook 20 Ways to Improve Your Finances in Under 20 Minutes for some more great ways to save more money.
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