Are you looking at your life and wondering how the heck am I ever going to find the freedom I’m craving with all of this debt?You don’t have to look far to see others around you who are traveling the world, living free, and who don’t appear to have a worry in the world. It can be frustrating and downright depressing when debt is getting in the way of your dreams to travel. I know I’ve been there! Several years ago we were struggling financially after the ski resort I worked at went into foreclosure and laid off all its employees. I was not only frustrated that we weren’t able to live the life we dreamed of, I was depressed because I wasn’t sure how to pay off the debt we had. What’s most frustrating is not knowing where to start.
Should you pay down debt that has the highest interest rate or should you focus your energy on the debt with the lowest interest?
Why we think the debt snowball is the best for getting out of debt
- The debt snowball is easy to implement and understand
- You see progress quickly
- You feel empowered and motivated because you see debt completely eliminated
the debt snowball explanation
How The Debt Snowball Method Works
Your objective with the debt snowball is to focus on paying off small debts first.For example, if you have 4 credit cards each totaling $150, $800, $300, and $1,200 you want to pay off the card that has the $150 balance first. Once you have eliminated the smallest debt, add the freed up money from paying off the first debt to the second, and so on. As you shortly say goodbye to 2 debts you begin to realize that this process is doable and the drive to pay off more becomes contagious. We like this method because it’s good for the mind. You of course need to keep paying minimums on your other debt but just put your focus toward your smallest debt.