Get Out Of Debt With A Debt Snowball
So you find yourself in a boatload of debt and are wondering how to get out of it. There may be many reasons why you slipped into debt but the reality is that there is only one way out. You need to stop using your credit cards immediately and focus on paying off the debt as soon as possible. One of the most popular and effective ways to do this is by using something known as the "debt snowball".
Think of a debt snowball as your own personal debt management service. Rather than paying someone else to reduce your debt, the debt snowball enables you to take full control over managing your debt and getting rid of it once and for all. Ironically, the reason that most people get into debt in the first place is similar to the way in which your weight can sneak up on you. It happens a little bit each day and without proper maintenance, it can soon get out of control. Now that you're here, how do you use the debt snowball?
The first step is to make a list of all the debts that you owe. The most critical pieces of information include the current account balance, the minimum payment that is due and the date of that payment. After you have gathered this information, it's time to begin.
The basic idea behind a debt snowball is that once you have paid off your first debt in full, that payment then gets applied to the next highest debt you owe and so on until it creates a "snowball effect" with larger and larger payments that are made towards the debt. To begin the snowball, find the account with the lowest balance and then continue to make the minimum payments on all the other accounts. Focus all of your efforts on paying off the smallest balance until it is completely paid off. Then, do the same with the next smallest balance and so on.
If you want to speed up the process even further, try contacting your debtors and ask them to lower the interest rates on your accounts. Even in these tough times, most lenders would at least consider doing this and if they do, the payoff could be substantial. Every dollar you don't have to pay interest can mean you get out of debt that much quicker so don't be foolish and overlook this step.
We wish you the best of luck in getting out of debt and living a debt free life soon!
Think of a debt snowball as your own personal debt management service. Rather than paying someone else to reduce your debt, the debt snowball enables you to take full control over managing your debt and getting rid of it once and for all. Ironically, the reason that most people get into debt in the first place is similar to the way in which your weight can sneak up on you. It happens a little bit each day and without proper maintenance, it can soon get out of control. Now that you're here, how do you use the debt snowball?
The first step is to make a list of all the debts that you owe. The most critical pieces of information include the current account balance, the minimum payment that is due and the date of that payment. After you have gathered this information, it's time to begin.
The basic idea behind a debt snowball is that once you have paid off your first debt in full, that payment then gets applied to the next highest debt you owe and so on until it creates a "snowball effect" with larger and larger payments that are made towards the debt. To begin the snowball, find the account with the lowest balance and then continue to make the minimum payments on all the other accounts. Focus all of your efforts on paying off the smallest balance until it is completely paid off. Then, do the same with the next smallest balance and so on.
If you want to speed up the process even further, try contacting your debtors and ask them to lower the interest rates on your accounts. Even in these tough times, most lenders would at least consider doing this and if they do, the payoff could be substantial. Every dollar you don't have to pay interest can mean you get out of debt that much quicker so don't be foolish and overlook this step.
We wish you the best of luck in getting out of debt and living a debt free life soon!
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