Debt & Budgeting
If you’re frustrated by your inability to get out of debt, you’re not alone. Millions of Americans struggle with debt, and they just can’t seem to get out of it. You can do it though, and financial experts have created specific strategies that can help you make steady progress towards becoming debt-free.
One of the most popular strategies is Dave Ramsey’s debt snowball method. When using this strategy, you make the minimum payment on each of your debts, and then make as big of an extra payment as you can on the debt with the smallest remaining balance. In other words, you pay off your smallest debts first.
How the debt snowball method works
As you use the debt snowball method, you will, hopefully, be able to pay off your smallest debt relatively quickly. At that point, you will be able to start snowballing your payments. All the money you had been using each month to pay off that first, small debt is now available for being used as an extra payment on your next smallest remaining debt. Each time you pay off a debt, you will have a bigger chunk of your monthly income that is available for use as an extra payment on your next smallest debt.
Is the debt snowball method right for you?
- Do you have many small debts that you have a hard time tracking? The snowball method is very helpful because you will quickly pay off the smallest debts and reduce the number of accounts and payments you must track.
- Do you need to have a quick win to keep motivated to continue paying down your debt? If your emotions have a strong effect on your behavior, you will benefit from using the debt snowball to build confidence in your ability to get out of debt.
- Do you feel overwhelmed by what you owe on your largest balances? The debt snowball plan lets you have some practice with the smaller debts first. As you make progress, you are more likely to stick with the plan and be ready to address the most significant debts when it is time to tackle them.
Getting out of debt is an excellent goal. It will make your life so much better and will free up your money for investments or travel, or whatever you want to do with it. The snowball method of getting out of debt has worked for many people. Give it a try and start working your way toward more financial freedom.
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