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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.
More Ways to Contribute
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.
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.
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