If your largest debt has the largest interest rate, it’s going to be a long time before you start to see a dent in that crazy balance of yours. Now, before you start arguing about the interest rates, hear us out. Step 4: Repeat until each debt is paid in full. Step 3: Pay as much as possible on your smallest debt. Step 2: Make minimum payments on all your debts except the smallest. Step 1: List your debts from smallest to largest regardless of interest rate. You can pay off debt faster! Get started with a FREE trial of Ramsey+. When the smallest debt is paid in full, you roll the minimum payment you were making on that debt into the next-smallest debt payment. The debt snowball method is a debt-reduction strategy where you pay off debt in order of smallest to largest, gaining momentum as you knock out each remaining balance. And if you’re following Dave Ramsey’s 7 Baby Steps, you’ll use this method when you reach Baby Step 2-meaning you’re current on all your bills and have a $1,000 starter emergency fund. So why in the world are we talking about snowballs? Because when you use this technique to pay off your debt, you’ll be debt-free in no time. As you gain momentum and speed, your snowball grows into a snow boulder. If you grew up around snow, you know that the fastest way to build a snowball is to pack some snow into a tight ball and start rolling it around your yard. Let us introduce you to your new best friend (and the fastest way to get out of debt): the debt snowball method. Looking to get out of debt-for good? You’ve come to the right place.
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