Creating a Debt Snowball

In order to get out of credit card debt quickly I am going to use a term called the debt snowball. It is a pretty simple analogy.

First of all you need to pay all your credit card and other debt payments on time. Do not miss one, or take the payment from one and put it toward another.

All regular payments need to be made on time to save late fees and major credit score problems. So if you have not been paying your debt on time, start doing it now. It’s the first step.

Then you need to evaluate your credit card debt. Pick the debt with either the lowest balance or highest interest rate. Then start putting all your extra money toward that debt.

Create a debt snowball payoff!

Often times people will put $15/mo toward all of their credit cards instead of $45/mo toward one. The problem is this does not create one huge debt snowball, but a few very small ones. Basically it will not help you reach your goal of getting out of credit card debt as fast as you would like.

By creating a debt snowball all the extra money you put toward debt goes to pay principal. You can pay off a credit card very quickly by simply paying a little more toward principal.

When that first debt is paid off you take the payment you were paying plus the extra and put it all toward your next credit card plus it’s original payment. So if you have one credit card with a payment of $96/mo plus $45/mo extra toward it. When that one is paid off you would take $141 plus your second credit card payment of $125/mo. And pay that all toward one card.

As this builds and builds for other debts that you pay off you can be out of debt very quickly.

Once you have decided on this process the next is to figure out how much extra will actually go toward your debt snowball. Now at first you may be tempted to say, “I have no extra.” Or “I only have $50/mo extra.” Now’s the time to cut the fat and have some lean financial times.

I bet you spend extra money you are not even aware of. Buying your lunch every day instead of bringing leftovers from home. Going out to eat, entertainment, gas, electronics, etc.

There are many place to cut costs. The key is to cut as much as you can and decide on an amount to put toward debt. Then when you get paid put the designated amount toward debt. If you wait to see if there is that much extra at the end of the month, you will have already spent it on unnecessary items.

You can get out of debt quickly by simply cutting out all the extras and building your debt snowball.



"A man in debt is so far a slave,"
Ralph Waldo Emerson.


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