You might feel a bit overwhelmed with your debts. You might spend many years swiping credit cards as well as signing for loans without hesitating. But then you realized that you have to take an action as soon as possible and get rid of your debts. Let read about debt snowball in the next paragraph.
However, like everything else, it takes time to build up, paying off debts do not happen overnight. Fortunately, you are not alone. Lots of people have gone through what you have been through and the good news is that there is a good method for you to get rid of your debts faster and easier than you thought possible. This method is called debt snowball.
An Overview of Debt Snowball
Imagine a snowball rolling down the hill at a high speed. It begins small, yet every turn down the hill, it also adds another layer of snow, which grows larger and gain momentum. When the snowball reaches the hill’s bottom, it looks more like the boulder than balls. It’s the theory you will apply to pay off your debts. You will begin small with focused intensity. In the long run, you will gain momentum. You might even be surprised yourself on how you crush your debts quickly.
How Debt Snowball Works?
You will pay your debts from the smallest to the larges no matter what the interest rate. Begin by grabbing a paper or opening docs and listing all non-mortgage debts from the smallest to largest.
Make small payments on every debt except the smallest one that must be at the top of your list as well as your top priority. Then, attack the smallest debts with vengeance. Give everything you’ve got and you might take on the second work, start business on the side or sell your things to earn more cash. Do everything you could to kick the first debts o your list to the curb. Once you have paid off the smallest debt successfully, add freed-up money to pay of the first debt to minimum payment of the next for you to get the snowball rolling. Now, you have more money you could throw for your next debt.
Do your best for your second debt while continuing to pay the minimum payments on all debts. Once you say goodbye to the second debt, work hard on it and send the money to your next debt you have listed. Keep that until you have crossed off every item and you are free from your debts. Imagine what money goals you could conquer with your debts paid off!
Why Debt Snowball Works?
This method basically revolves around behavior modification. Through seeing results quickly, you are more inclined to stick with the program until the very end. The first time you have ditched debts, you will experience high of sorts. You are also making progress, making you feel great. That small nagging debt will be out of your life. And the thought of beating your other debts will be more like a reality instead of a possibility.