Stop Living In Debt: Use The Debt Snowball Method
Getting rid of debt can be a scary thing. I’ve read borderline horror stories about how people practically stop living to get this debt-burden off their back. Sorry, but as motivated as I am to get out of debt, I’m not ready to stop experiencing life for the next 5 years…
I want to get out of debt and still live at 110%!
Even if they’re extreme, those stories didn’t stop my excitement, my motivation to be financially free, my need to watch my debt be utterly destroyed! Instead, they fueled my drive when I could see people accomplishing what I wanted. Now, I just had to find how I could do it my way.
Do you get a little nauseous when you add up your debts? How about a giddy feeling visualizing what your life will look like with that debt completely gone? Are you constantly reworking your budget to get the most accurate look into your finances?
Good, I do all that too! That means we’ve got the motivation to make debt freedom a reality!
If you think there’s no way you can erase your debt, please read on before giving into the doubt. The Debt Snowball Method of paying off debt has been instrumental in allowing us to already knock $24K off our debt pile in three years!
You Can Get Out Of Debt No Matter Your Income
Because I believe in it this much, I will never stop promoting this tool. For those number-lovers like me it gives us REAL numbers, a REAL timeline, and REAL motivation to dig ourselves out of our debt hole!
Your monthly expenses never increase with the debt snowball, but it can save you thousands on interest that would otherwise be incurred.
Yup, thousands!
How can that be possible?
It works by paying off the highest interest rate liability first, then transferring that payment to the next highest interest liability.
Yes, it would be nice to see your overall expenses decrease and your savings account increase… BUT understand that you have ALREADY prepared your budget to allocate that payment to your expenses.
Why stop now? You still have debt.
If you can afford your minimum payments on your debts with your income level, then you CAN start your Debt Snowball! Any extra you can allocate each month will just be a bonus.
Ready? Let’s Get This Snowball Started
1| Information
You’ve already agreed you’re giddy to get started! First though, you will need to gather information about each of your debts such as:
- Principle owed
- Interest rate
- Monthly payment amount
2| Input Numbers
After you’ve gotten all your numbers (don’t try to guess here, actual numbers are needed even if they’re not pretty), input them in a Snowball Debt Calculator and explore your results.
This is my personal favorite calculator to use!
Feel free to play around with things!
Sometimes I spend hours playing with how much extra money can we allocate to debt each month? What happens if we pay this debt first? When will we actually be finished paying off debt? Seriously… hours.
3| Play Around
The calculator I use gives me a nifty spread sheet of the payment schedule, so I always know how much to put towards what debt. Easy peasy lemon squeezy.
In fact, it’s so easy that if anything changes (say your stinking awesome husband sells some stuff on Craigslist) and you knock out a debt quicker then planned, just put in the new numbers and hit submit.
4| Put It Into Action
Don’t forget to incorporate your snowball payment into your monthly budget. If you need help creating one, check out how I Build A Budget for myself and friends!
Once you have your numbers, payment planner, time frame, and motivation from seeing that large amount of interest you’ll NEVER HAVE TO PAY, you will know exactly what you needed to do to make your debt disappear!
