Baby Step # 2 – Pay Off All Debt using the “Debt Snowball”
List all of your debts, excluding the house, in order. List the account with the smallest balance first. Don’t worry about interest rates unless two debts have similar payoffs. If that’s the case, then list the higher interest rate debt first. Continue listing your accounts in order with the lowest payoff balance first and ending with the largest payoff balance last.
Personal Finance is 20% Head Knowledge and 80% Behavior.
The point of the debt snowball is simply this: You need some quick wins to stay excited about getting out of debt! Paying off debt is not usually about the math. It’s about the emotional victories that lead to MOTIVATION. When you start paying off the easier debts, you will see results and find the emotional will power to stay motivated about getting rid of ALL of your debt.
The Debt Snowball is really pretty simple… check out the video…
Here is a form you can use to build your own “Debt Snowball”
When you get out of debt, you will begin to feel more in control of your life, experience more peace in your life, and have the freedom to make decisions based on what God has designed you to do in this life. Debt is a master that demands your time and your service. Armed with the “Debt Snowball” you have the power to free yourself from Debt and live the life you were really designed to live!