Things You'll Need:
- All bills you want to include in your debt reduction.
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Step 1
There are many different techniques that are used to snowball debt: paying the largest /smallest balance off first, paying the amount with the highest interest rate off first, etc. I prefer paying the balance with the smallest amount off first. The motivation for me is to see a “paid in full” or 0 balance early in the process.
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Step 2
Gather all bills you want to include in your snowball reduction plan. Prioritize them according to their balance (small to large).
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Step 3
Decide how long you would like to give yourself to reach a 0 balance on your smallest bill. For example, if your furniture bill is $255.00 and you would like to have it paid in full within 3 months, that breaks down to a minimum payment of at least $85.00 for three months. Put more towards it if you can.
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Step 4
Continue to pay at least the minimum on your other bills. If you are like me, you want to see your balances go down as quick as possible but give yourself credit for at least staying motivated and focused enough to even implement a debt reduction plan. You have already done more than you know just by making up your mind to begin the process. You will eventually see more “paid in fulls” and 0 balances the more you keep at the process.
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Step 5
Take your next smallest bill and divide it up like you did the first snowball. Repeat month after month with each new bill. You will automatically see money within your budget open up. Save this money that you are no longer sending in to credit card companies, etc. for your emergency fund so that next time something happens you won’t have to panic and use plastic.
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Step 6
Good luck, I believe that you can do it!
Comments
starlet67 said
on 1/19/2009 Great debt-relief strategy! 5*
BCPASSIONS said
on 11/16/2008 This article can definitely put someone on the road to freedom, great article.
rjessiegreen said
on 11/5/2008 I'm starting with these tips today! Debt-free here I come! (It's gonna take a minute though)
listenhere101 said
on 10/22/2008 Miss lady, this article is so on point. I hope everyone. Get themselves together. It is hard, to find anything with our prefect of next to prefect credit. thanks a bunch.
deyoncc said
on 10/21/2008 With this information, anyone can succeed.