The snowball method is a simple debt elimination strategy that can be employed by anyone of any income level to quickly pay off debt.
Begin by making a chart of all outstanding debt and list your monthly payment.
Then, organize your debt in order of highest monthly payment to lowest monthly payment.
Each month, pay the minimum payment on all debt except the lowest.
For the lowest debt, pay the minimum plus any extra you can. Ideally, pay double (or more if possible) to quickly pay off this loan.
After the lowest debt is paid off, roll what you were paying on it
into
the next lowest debt. It will be the next loan you pay off.
This accumulation method, like a snowball effect, works because it’s clear and concise. By tackling the smallest debt first, it’s easier not to be overwhelmed. Once it’s paid off, you’ll feel more empowered to tackle debt after debt till there’s none left! (Reynolds, 2017).
For more information on debt elimination services such as financial counseling or financial planning, please contact us at (800) 326-6190 or by emailing info@newdimensionsfcu.com.
Article submission from CUINSIGHT.COM on March 7, 2017 by Jennifer Reynolds
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