023: Debt “Snowballing”
In previous episodes we discussed how to decide what debts to pay off first, how to prioritize them. Today I’d like to share with you a concept called “Snowballing”. You might be wondering what it has to do with debts?
Well, Snowballing debts means, setting up a schedule of what debts you will pay off first.
- Arrange your debts by Highest Interest or Lowest Balance
- Dedicate how much extra per month we will devote to our payoff schedule
- Add this additional money you will add to your minimum monthly payments
- Once the 1st debt is paid off, then move the extra payment and the minimum payment from debt #1 to debt #2, and so on.
I use a free site: www.whatsthecost.com to create my snowballs. When you get to the site, on the left hand side click on “Snowballing.