How appropriate since we are experiencing crazy cool weather that we talk about the "debt snowball". This snowball has nothing to do with cold though. Yes, this is from Dave Ramsey. It is an ingenious plan to get out of debt. I am not judging anyone, remember, I have made these mistakes and I know it is easy to get into debt. In fact I got into debt in college with my first credit card, that I had no business having. I had a modest job and was going to school and they gave me a crazy high credit limit. Needless to say I let it go to my head and bam!! Debt. I am sharing all of this because if my mistakes can keep someone else from making them or help them recover from them then it is all worth it. You know the old saying, if I had known then what I know now. Well here ya go.
Look at each of your credit cards and loans, list them from smallest balance to the largest balance. We are only going to think about the balance, the bottom line nothing else. You want a quick win, that means paying that first balance off quick. This means putting any extra money you have left after you; give, save, and pay bills. Always give first, even if it is just a few dollars it will help someone else and will open doors for you that no man can close. Then you pay yourself (save) and then take care of those bills. Macy's should not get theirs if your house payment and power bill is not being paid. Take care of your family first. While you are pouring extra money into that one smallest balance try to keep up your minimum payments on all the others. Once you have paid that first one off, shout wahooo and if it was a credit card cut it up. As Dave says, do a little plastic surgery, it will do wonders for your bank account. Now you take what ever you were paying on that balance plus the minimum you were paying and start paying the next smallest balance on your list. This is called the "debt snowball" and it does work. I am proof positive it does. I kept a copy of my balances on my fridge and as I paid things off I took a red pen and marked through them. It was a great feeling when we got down to just the house being on that list. We are now dumping crazy money at the house to get it paid off so we will truly be debt free. It took me two years and we were not in as bad a debt as some but we took things slowly and made sure we were giving and saving while we were paying off our debt.
Look at each of your credit cards and loans, list them from smallest balance to the largest balance. We are only going to think about the balance, the bottom line nothing else. You want a quick win, that means paying that first balance off quick. This means putting any extra money you have left after you; give, save, and pay bills. Always give first, even if it is just a few dollars it will help someone else and will open doors for you that no man can close. Then you pay yourself (save) and then take care of those bills. Macy's should not get theirs if your house payment and power bill is not being paid. Take care of your family first. While you are pouring extra money into that one smallest balance try to keep up your minimum payments on all the others. Once you have paid that first one off, shout wahooo and if it was a credit card cut it up. As Dave says, do a little plastic surgery, it will do wonders for your bank account. Now you take what ever you were paying on that balance plus the minimum you were paying and start paying the next smallest balance on your list. This is called the "debt snowball" and it does work. I am proof positive it does. I kept a copy of my balances on my fridge and as I paid things off I took a red pen and marked through them. It was a great feeling when we got down to just the house being on that list. We are now dumping crazy money at the house to get it paid off so we will truly be debt free. It took me two years and we were not in as bad a debt as some but we took things slowly and made sure we were giving and saving while we were paying off our debt.
When I talk about giving I am talking about money, time, and things you may not need. Especially this time of year there are so many that are in need that if you have things laying around that you cannot wear donate them to your local Samaritan Ministry, Church, Goodwill or the Salvation Army. There is an old adage that when you give you get back ten fold. This means when you give you get back ten times what you gave. You may not see it immediately but it will come back to you. Our family has been so blessed because we share generously. If you have not realized, I am a very passionate person, about God and my family and what I believe in. I truly believe in sharing and the blessing that we have received because we have shared. I have gotten a little off track today, sorry about that but I do believe I needed to share.
So far we are trying the envelope system and working on that debt snowball. Stay tuned who knows what I will tell about next week.
So far we are trying the envelope system and working on that debt snowball. Stay tuned who knows what I will tell about next week.
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