You’ve probably heard the term “debt snowball” before. Have you ever had the opportunity to try out the technique? It’s a great method to use when really focusing on killing your debt. So if one of your resolutions is to eliminate your debt, you’re probably going to want to give it a try.
Stacy Johnson of Money Talks News walks us through the strategy with the help of Play-Doh:
But it’s fairly simple. Use the following 3-step method:
- Step #1: List every debt you have
- Step #2: Target one debt for payoff and pay minimum payments on other debts
- Step #3: Crush targeted debt and then “snowball” (take extra money and pay off the next debt)
You can either focus on paying off the debt with the lowest balance or the debt with the highest interest rate. But either way, focusing on one debt at a time will help you to eliminate your debt faster.
Read more over at Money Talks News’ Resolutions 2014: Kill Your Debt and Then Write Its Obituary.