My husband and I took Dave Ramsey’s FPU in 2007 and started a debt snowball then. You’d think we’d be totally out of debt 12 years later, right? But we aren’t. Sigh. Had we applied all we’d learned we would be, but wouldn’t you know…we didn’t.
And we aren’t.
Oh, we followed the course at first, used the debt snowball method, and paid off all debt except our mortgage. Unfortunately, we didn’t stick to what we’d learned and soon had debt wracking up again.
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I firmly believe in Dave’s methods, though. From the moment I first read The Total Money Makeover to the 13 week Financial Peace University class we attended to now, I am positive that his methods work even if we did go back into debt after our first time using the debt snowball method.
That’s not the debt snowball’s fault. Nope. That’s simply failure to implement on our part.
If you’re struggling with debt, I feel confident the debt snowball will help you, too, as long as you put the steps into action. That’s what I’m going to do…finally! Telling you about it will help my accountability. Hold me to it, y’all!
Okay, so first of all, if you’re new to the term ‘debt snowball’ let me explain what that is. Dave Ramsey, financial guru, suggests following a debt snowball to pay off your debt.
Where some financial advisers recommend paying off the highest interest loans, Dave suggests instead paying off the lowest balances first.
While the ‘math’ might not make as much sense to pay lower interest loans first, Dave insists it’s not about math; it’s about emotion.
When you pay off those smaller debts, you see progress much faster. Once that smallest is paid off you move to the next smallest and so on.
The ‘snowball’ part comes in when you throw all the money you can at that lowest balance. All the rest of your debts, you pay minimum payments on.
When the first balance is paid off, you take what you were throwing at that debt plus the minimum on the next debt in line and throw that ‘snowball’ again.
You keep rolling those payments together, and as you get debts paid off, your snowball gets bigger and bigger.
While you might think, “Why should I take debt snowball advice from Julie when she hasn’t successfully kept her debt balance at 0?”
My answer to that is this… I may not have succeeded in following through after the snowball, but I definitely know how to throw snow.
If you aren’t ready to listen to me, just follow along as I pack my snowball together and start wiping out my new debts. See how I do and then start throwing your own.
Or better yet, start throwing your own anyway. We can have our very own debt snowball ‘fight’. Ha!
Here’s how to get your debt snowball rolling:
- List your debts in order from lowest balance due to highest. You don’t have to include your mortgage in this list. That comes later.
- Work with a budget to fine tune your spending and make sure you can get every extra bit of money so you can make your snowball as big as possible. My husband and I use YNAB (You Need a Budget) and highly recommend it.
- Throw that snowball at the smallest balance (pay minimums on the rest)
- Keep going! Don’t stop.
I use a Google Sheet to keep track of my debt snowball; I didn’t create it, but it’s free and comes with directions and a Help video. You can see my spreadsheet here.
I have it set as View Only, but if you go to File, Make a Copy, you can make your own copy and use it for yourself if you’d like. It’s not fancy, but it works!
Just like with any lessons we learn, change can only be made if we actually implement what we know.
Our goal, mine and my husband’s, is to finally put into practice the steps we’ve learned so that we can become debt free. No more being a slave to the lender! Amen!?
Here’s a link to that spreadsheet again —->>>>> Debt Snowball Spreadsheet
And be sure to try out You Need a Budget (YNAB) free for 34 days to make a plan for your money. It has helped us find ‘extra’ money in our monthly budget to get our emergency fund in place and start paying big chunks on debt. I can’t wait until I can help with my kids’ student loans, too!
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