Day 7
We all know that the wise men did not have snowballs with them on their journey. They?may not?have even seen snow. But the snowball is the?essential tool to use when getting out of debt. The concept is to list your debts from smallest to largest by the balances?owed. This does not include a home mortgage, but it would include a home-equity line of credit (if it is less than half your annual income).?Your snowball could include the following items: student loans, car debt, medical debt, credit cards, recreational vehicles etc. The list can be modified to meet your individual debts.
Once you have a list of smallest to largest?balances, put the minimum monthly payment amounts in your budget. When you make your monthly budget, any?money that can be?allocated above these minimum payments will be applied?to the smallest debt. When that is paid?off, you will take the previous minimum payment of the debt that you just paid off and apply it, plus any extra money that you earn or can squeeze out of your budget, to your next smallest debt. As you pay off debts and roll their payments into the next debt, you will snowball into larger payments with quicker pay-off times. Your snowball will gain momentum and you will gain encouragement as you see your debts paid off in a organized and timely fashion. Get focused in 2013 and get your snowball rolling!
Do you have a debt snowball success story to share?
Source: http://www.gerkenfinancialcoaching.com/2013/01/debt-snowball/
john tyler chuck elisabeth hasselbeck fran drescher scarlett o hara pat sajak vanna white
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