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Earlier in our post Budgeting 101 I mentioned paying down debt using the Debt Snowball method. The Debt Snowball method is one of the baby steps created by Dave Ramsey in his book The Total Money Make Over. It is simple and real easy to start: grab a pen, a piece of paper and the budget you created during Budgeting 101. During your budgeting you may have listed or found debt that you are having issue paying off such as school loans, car loans and credit card debt just to name a few. Take these items and list them from smallest to largest, don’t worry it is common for these debt amounts to fluctuate from month to month given interest and payments.
Now that you have your debt list written down and you are are visually aware of the task at hand you can work your debt snowball into your budget. Yes, this may be overwhelming at this point. Step back and take count that many people before you have done this and you have the power to rid yourself of this debt. You have the power to be DEBT FREE. Your job now is to assess your budget and work hard to create extra money to pay down your debt snowball starting with the smallest item working your way to the largest item.
You may be thinking how is that possible considering we are living pay cheque to pay cheque. Well this is where the hard work comes in. You are going to need to stop spending money on things you want and direct your money towards things you need and your debt snow ball plan. You may consider selling off items you don’t use or items that are pulling a large portion of your money such as new cars and big toys. You may search out a new or extra job to make more money to meet your goals. You can look for possible job listings here. Being creative with your life and your money will get you through this step. During your debt snowball you will make sacrifices like passing on dinners out, trading in the new mini van for a slightly used model, buying generic versus brand name items and learning to say NO. Attack your debt with full force, throw as much of your funds on the top debt and work your way down the debt snowball all while making the minimum required payments on the rest of the items in your budget. Believe me I have lived this step and we still are living this step and it is hard but the great reward is seeing the debt go down and we have less stuff. Simple living, happy living and being debt free go hand in hand.
Have an Amazing Day and remember to “Live like No One Else so that You Can Live Like No One Else.”
You can do this.