Snowball Your Debt

Snowball Your Debt

Debt is that nasty four letter word that starts with a D!  Yes it is!  I hate that word, because it causes so much stress!  If you hate that word as much as I do, or have that word in your life more than you want to, keep reading!

Getting out of debt, or at the very least getting our finances under control, is a crucial part of being prepared.  President Gordon B.

Snowball Your Debt
Start today. Work your way slowly bit by bit and climb out of that debt!

Hinckley of The Church Of Jesus Christ of Latter Day Saints said this: “Self-reliance cannot be obtained when there is serious debt hanging over a household. One has neither independence nor freedom from bondage when he is obligated to others.”  Another quote, President J. Reuben Clark Jr., in the April 1938 general conference, said from this pulpit: “Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you”

The number seven cause of divorce, according to a survey done by Huffington Post, is finances!  You can read more of that post right here.   Is there any wonder now why so many people don’t even bother to get married?  Finances, communications, so many things to work out!  Well, I still believe in marriage!  I think it is a wonderful thing!  I have been married for almost 30 years!  But, I totally agree finances can make it incredibly stressful!

The average American household carries just under 17,000 in credit card debt.  That in itself can be extremely stressful on a person, let alone on their marriage.  Do you really like carrying all that debt?  I know I sure wouldn’t.  Now, I am not saying I am perfect because I use credit cards, and myself have not always been wise with them. So I am talking from experience here, not one that is just shooting from the hip!

It is a tough one, if one of you likes to spend and one doesn’t, or one uses credit and one doesn’t, or your communication skills just don’t jive.  I get it!  If you find yourself in the issue of being in debt, and it is causing you or your family undue stress, there is a method to get you out from under it.  It isn’t an easy one, and it takes commitment, and it takes a little bit of time, but if your game, you can do it.  It is called the snowball method!  You can learn it in greater detail here in Dave Ramseys Website, which is full of a ton of great information, but here is the jist of it all.

First step to getting out of credit card debt, or student loan debt, or whatever kind of debt you have, is to stop using credit to purchase things.  This takes some discipline, especially if you are used to just buying whatever you want on credit.  It takes commitment, which can be difficult for many people. If you seriously want to pay this debt off, and save yourself literally thousands of dollars in interest, (and who wouldn’t?) hop on over to this snowball debt calculator, or find your own,  and type in your personal numbers, to see the differences in how you can make that happen.  It might open your mind to a bit of a reality check regarding how much interest you really pay, and how long it will take to pay it all off.

Snowball it!  Figure out what you can afford to pay extra, on your highest interest debt, then pay that extra on it until it is paid off, in the meantime, pay the minimum balances on all your other debt.  Once that first one is paid off, take that payment you were paying on it, and add it to your next highest interest rate debt, with the payment you were making to it.  Keep paying until that one is paid off, still paying the minimum balances on all the other debt.  Once that second one is paid, add that payment to the amount your were paying to the third debt, and so on, until all of your debt is paid off.  It actually is a pretty great method, one that you can see results quickly.  It can reduce the amount of interest you will pay over the next ten years or so, to minimal amounts.  It can relieve the stress in your world.  It can reduce the number of months you need to pay to get out of debt from 100 to 28.  It really works!

Dave Ramsey has a great book here, which you may want to purchase.  It is incredible!  If you need some financial help, this book is a great starting place!

Now I just threw in some random numbers into the debt reduction calculator, and this is what I came up with. If I owed $21,345 to various debt, and I only paid $650 per month in payments, it would take me 131 months to pay it off and I would end up paying $14,298 IN INTEREST!  That’s crazy! But…. if I added the extra $300 per month to the debt payment load to one of the payments, then when that’s done, add all of that to the next and so on, like in the Payment Schedule below, I would then have that payment of $21,000 paid off in 29 months, and only have to pay $5714 IN INTEREST!  Which is still ridiculous, but I save $8583 and am done paying my debt 102 months earlier!  That is 8 years and 6 months that I don’t have to pay debt down.  That is 8 and a half years, that my pay checks could be mine instead of owing them to someone else!  That is 8 and a half more years you could be debt free, if this was your scenario!  I don’t know what your debt load is, but it is worth trying to get rid of it asap, just to save thousands of dollars in interest alone, let alone the stress and other issues that people deal with, that come along with debt!

Accelerated Debt-Payoff Plan Payment Schedule Sample

Pmt# 1 2 3 4
1 400.00 300.00 150.00 100.00
2 400.00 300.00 150.00 100.00
3 400.00 300.00 150.00 100.00
4 400.00 300.00 150.00 100.00
5 400.00 300.00 150.00 100.00
6 400.00 300.00 150.00 100.00
7 400.00 300.00 150.00 100.00
8 400.00 300.00 150.00 100.00
9 400.00 300.00 150.00 100.00
10 400.00 300.00 150.00 100.00
11 400.00 300.00 150.00 100.00
12 400.00 300.00 150.00 100.00
13 400.00 300.00 150.00 100.00
14 400.00 300.00 150.00 100.00
15 248.03 451.97 150.00 100.00
16 700.00 150.00 100.00
17 700.00 150.00 100.00
18 700.00 150.00 100.00
19 700.00 150.00 100.00
20 700.00 150.00 100.00
21 700.00 150.00 100.00
22 700.00 150.00 100.00
23 700.00 150.00 100.00
24 700.00 150.00 100.00
25 262.94 587.06 100.00
26 850.00 100.00
27 850.00 100.00
28 335.82 614.18
29 459.23

I don’t know what your debt numbers are like, and if you don’t have any, then hats off to you!!!  However, if you are like most of us, we have some debt we have to deal with, so let’s get busy and deal with it!  The sooner you get rid of it, the sooner you can save money for whatever else you might need, like, I don’t know, maybe RETIREMENT!  Because we all know that one creeps up really fast!

Good luck and my prayers and blessings are going your way as you work your butt of to get out of debt as soon as possible.  Be Thrifty and get out of debt!

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