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You are here: Home / Blog Entries / The Debt Snowball

The Debt Snowball

By Steve Stewart on December 14, 2009

The Debt Snowball
One big huge snowball!

One of the most effective ways to pay off debt is by using a process called the “Debt Snowball”.

The concept is very simple

Pay minimums on all your non-mortgage debt and take any extra money you can squeeze out of your budget and apply it to the debt with the smallest balance.  Doing this will allow you to knock one of your debts off your list very quickly.

The next step

Take the amount of money you were paying on that smallest debt (the minimum and any extra) and apply that to the next smallest debt (along with that debts minimum) until you knock that one off.

Every time you pay off a debt

Each time you pay off a debt you have more money to apply to the next smallest debt on your debt snowball list. Taking the minimum payments from those debts you already eliminated and applying it to the next smallest debt’s minimum payment will allow you to greatly reduce the balance of a $10-a-month bill or $1,000 balance. Each time you knock one off, it picks up more snow!

About Steve Stewart

Hello. My name is Steve Stewart and I HATE YOUR DEBT MORE THAN YOU. I believe everyone should be rich so they can help others in times of need. Life is too short to be this broke! Let's work together on designing a plan for your house of financial freedom. Don't be afraid to reach out to me - I'm here to help answer your call for help (S.O.S.) with a MoneyPlan.

Reader Interactions

Comments

  1. Twista says

    December 14, 2009 at 6:20 pm

    Well normally I am not afraid to turn down anything free, but I don’t have any debt so I don’t think it will really help me….

    • MoneyPlanSOS says

      December 15, 2009 at 8:17 pm

      That’s GREAT! Good job! You are not normal – Normal is Broke. You can help by forwarding this offer to someone else who could use the help, and likes free stuff.

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