The Debt Snowball: The Fastest and Easiest Way To Pay Off Creditors
How to use Dave Ramsey’s debt snowball method to quickly pay off debts
We are what we repeatedly do. Excellence, then, is not an act, but a habit.” — Aristotle
A debt snowball is not a crumpled up wad of your bills for you to throw around in the snow. It is a debt reducing strategy that I learned from financial guru, Dave Ramsey. I have tried almost every financial strategy in existence and this one is the one I recommend to my financial or credit analysis clients.
Using this method, paying off debt can be done a little at a time for faster results and skyrocketing credit scores.
Step One
Add up all of your debt and allocate them into categories such as credit cards, medical, collections, loans, etc. Then further allocate them by the ones with the highest interest rate down to the lowest. Use the method on each section or, if you can only do one at a time, start with the debt that has interest on it.
Step Two
Pay the minimum payment due on all except the one with the smallest balance or the highest interest rate. I would recommend sorting first by interest rate and then by balance to save the most money in the long run. However you decide to do it, pick the one to pay as much over the minimum payment as you can afford.
Repeat until the first debt is paid off.
Step Three
Repeat the first two steps over and over with the remaining debt until everything is paid off and you are one of the rare, debt-free individuals that we hear about so often.
After that final debt is cleared, you will be amazed how fast things got better for you financially and regretful for how long it took you to do it. Suddenly, you’ll be in the position to buy something that you need when you need it and use cash. Being debt free is an amazing feeling to have especially if you have almost drowned from it before.
That doesn’t sound like a big deal to some people, but I know many, many people who pray for only that circumstance to happen in their lives before they die. They just want a chance to not worry constantly about making ends meet for a few moments in their life before it’s over.
I am a definite realist and true unbeliever in fairy tales. So, please believe me when I tell you that this goal is attainable for everyone. Anyone willing to put in the work can make this happen. As with anything else, small changes and/or steps done on a consistent basis will quickly lead to great accomplishments.
My favorite financial quote has always been, “It is not how much money you earn, but how much you don’t spend that determines your wealth.”
Kylie finds herself funny and is a mixture of sarcasm, White Zinfandel, attitude, and love. In addition to humoring herself, she also is a Real Estate Agent and a Property Manager. She lives in Georgia with her huge, loud family.
