Using the Debt Snowball to Pay off Your Debt

Today, we are going to focus on the DEBT SNOWBALL. This is a term that Dave Ramsey uses when talking about paying off your current debts. Get out your notebook paper once again, and let’s start writing some numbers down.

On that sheet of notebook paper, write down every single debt that you have, from smallest to largest; no matter who it is owed to. Even if you owe Aunt Suzie $50.00, write it down! We want to get them all on paper.

The Debt Snowball is a pretty easy plan to use when paying off your debt. You begin by paying off the smallest debt that you have; then you take the amount you were paying each month on that debt and apply it to the next one on your list.  So if you were paying Aunt Suzie $5.00 a month toward what you owed her, once you pay her off, you will apply that $5.00 a month to the next debt on your list, IN ADDITION TO what you are already paying. So if you were paying $75/month on the next debt, you will now be paying $80/month on that debt. You keep doing that with each debt you pay off.

Here is another example: once you’ve gotten the smaller debts paid off, now let’s look at the car payment, which is the next debt on your snowball list. You are currently paying $350/month for your car payment. You have now paid off 3 smaller debts, which were costing you $75/month in payments. Now that the smaller debts are paid off, you can take that extra $75/month and add it to your car payment, making that payment now $425/month. You will now begin to see this car payment decrease a lot faster than it would have normally, with just the $350/month payment.

For us, when we got these smaller debts paid off, and began applying that amount of money to the next debt on the list, we were really starting to get excited! It felt good to have already paid off those 3 small debts, and now start working on this big one.

No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.  Matthew 6:24

Now, before I go any further, I want to explain something. If you do not have the money to pay on all of your debt … you find it! You find it in making choices to eat out less, cutting your grocery bill, selling an extra car that you really don’t need, garage sale, sell furniture that you really don’t need…and so on. YOU HAVE TO MAKE SOME HARD CHOICES IN ORDER TO MEET THIS GOAL. But like I said last week, it will be so worth it, once you start seeing these numbers drop! I promise you!

We got rid of one car. This was a tough one, because I loved this car!!! It was one of the best cars I had ever had! I did not want to get rid of it. But we had to in order to meet our Debt Free goal! We took our income tax refund and instead of spending it on something fun, we applied it to the debts…every single penny! We sold furniture. I sold clothing I didn’t wear anymore. Some of you may have baby items that you no longer need. Sell it! There are people out there that need this stuff! And YOU need to pay off your debt!  Yes, some of these choices are hard…but again, it is worth it in the long run! Any extra money we had, we applied toward our debts.

On May 10, 2017, just 15 months after we started this debt free journey, I retired from my job, at the age of 58 years old. The week before that, we paid off our last debt. (Remember, we are NOT including mortgages in these steps!) When my husband looked at me and said, “you can now be what you have always wanted to be…a homemaker”, I started to cry! That day finally came! And it was only because the debt was now paid off and we could afford for me to stay home! Like I said, when you are finally able to do what you have always dreamed of doing, making those hard choices will be so worth it!

Let’s look at some ways to earn a bit more cash to help pay off those debts. See how many of these ideas you are able to do to meet your own debt-free goals. These are some of my favorite websites:

18 Quick Ways to Earn an Extra $100

How to Make Money Fast – 107 Ways to Make $100

100 Ways to Make Money Fast!

Need Money ASAP? 25 Clever Ways to Earn Cash in the Next Hour

I’m sure you will find some ways in these blog posts above, to find that extra money. Again, it all boils down to CHOICES you make to get out of debt! If you’re not willing to go the extra mile, or to work the extra hours, or to sell the extra stuff, it’s not going to work too well for you!

What does being debt free mean to you? What would you do if you were totally debt free? Share with me in the comments below! I’d love to hear it!

Until next time, be blessed!

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