As of March 2020, the average American balance carrying household has $9,333 in credit card debt and the total revolving consumer debt in the United States stands at 1.03 trillion dollars!
That’s a lot of money. And most of it weighs heavily on American families; causing stress and anxiety that affects everyday life. Despite the hardship it causes, it’s not an easy task to get out of credit card debt.
Interest rates, minimum payments, and stagnant wages make it incredibly difficult to conquer debt quickly.
There are many different methods and strategies for paying off debt out there. It can be overwhelming to be unsure of which one to use.
However, the debt snowball method has quickly become a favorite among millions of American households that have paid off their credit card debt using it.
The whole idea behind the method comes from the concept of gaining momentum when rolling a snowball.
You first create a very tiny ball of snow and you roll it across the yard and before you know it, it’s become huge just through traction. This method uses psychology to motivate you and propel you forward.
A Quick, Proven Method: Debt Snowball
When using the Snowball Method, utilizing organization will help set you up for success. So, start off by setting up an Excel spreadsheet to list every single one of your credit cards that you want to pay off.
You can include other debts you want to pay off as well, depending on your priorities, such as your mortgage, student loans, medical debt, title loans or tax debt.
Then rearrange them in order of smallest to largest, without any regard for the interest rate!
Once you have determined which debt of yours has the smallest balance, continue paying only the minimum payments on every debt other than that one. The debt with the smallest balance, regardless of interest, is going to be the debt that you go full in on paying off first.
Throw all your extra money at that first debt. Pay as much on it as you possibly can every month. And if you have extra money left over at the end of the month then put that to it as well.
See what ways you can cut down on any unnecessary spending so you can put more money towards that debt. Keep doing this until it is completely paid off!
Once the smallest debt has been paid off, you will take all the money you were putting towards the first debt monthly into the second smallest debt.
Keep paying only the minimum payments of the other debts and having one less minimum payment, you can now pay extra each month towards the next debt.
You’ll likely feel proud and excited by the fact that you’ve paid off a debt already that it will further motivate you to find more ways to put extra money towards the second debt until it is paid off.
Keep repeating this process until each and every debt increasing in size is paid off in full!
This method has been proven to be effective and very fast if you are willing to be disciplined and make sacrifices. Freedom from debt will be the best gift you give yourself this year and it is well worth the effort you put in.