Run For Your Life: My Journey to Debt-Free

That's a Big Snowball

Posted by I Hope , Tuesday, September 9, 2014 12:42 PM

I am in Baby Step Two: The Debt Snowball. The concept is that a person would list their debts from smallest to largest and attack them one at a time, regardless of the interest rate as to pick up momentum in paying off debts.

If a person had a $200 medical bill and was paying $50 a month, a $600 credit card bill and was paying $80 a month and a car loan of $10,000 and was paying $150 a month. The would list them like so: $200...$50 per month $600...$80 per month $10,000...$150 per month. The person would then do all they could to pay off that $200 bill, in addition to trying to add to the $50 per month all while paying the minimum on the other debts. Once it was paid, the person would add the $50 payment to the $80 payment so pay $130 on the $600 bill and anything extra that they could get their hands one. Then, once that is paid, the would add the $130 to the $150 per month to pay the car off. So that snow ball would get bigger and bigger until all the debt is paid.

The problem with my debt is that I only have one, so it's one HUGE snowball. So, I just need to do some heavy lifting to get this thing rolling. And it's heavy, but I'm lifting!! My goal is $1000 a month on my debt. At that rate I should be able to pay off my loan in less than 5 years, but we will see!!