You may or may not have heard of Dave Ramsey’s Debt Snowball, but if you have, believe me, you’re going to want to hear how we managed to make the snowball even faster. In just 6 months, we were able to pay off over $6,000 worth of debt! If you had told me 5 years ago that I would be able to put $1,000 per month toward debt I would have told you you were crazy. We were living paycheck to paycheck. There was no way. Here’s the breakdown of how we made it happen and how you can too.
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Before you get started with the Debt Snowball, I highly recommend looking into debt consolidation if you have multiple debts through different companies.
Working with a company like Lending Tree for debt consolidation you could receive one lump sum payment between, $1,000 and $50,000.
You can then use this money to pay off multiple debts.
Doing this gives you one easy to make, monthly payment and may give you a lower interest rate so you end up paying less interest on your debt.
This is especially helpful if you have debts with credit card companies because most credit cards companies are charging you
Opting for debt consolidation can help you pay off those high-interest debts and avoid the additional costs while simultaneously simplifying your payments.
I’m going to try to keep this cut and dry. The idea of the debt snowball is all about starting small and accumulating more and more (payoff) as you go. A quick run down looks like this:
The first step in starting the Debt Snowball is finding an additional $200 per month to put toward debt. If you have no idea how to even get started finding an additional $200 per month, I have some great posts that can help you get started.
It can be stressful trying to come up with an additional $200 per month to put toward the Debt Snowball.
Maybe you have already cut your memberships, you don’t have cable and don’t know what else to do.
Grab your Debt Snowball Printout to get started!
Once you have your $200 extra per month, the Debt Snowball gets pretty simple. I recommend downloading my Debt Snowball printable to help you keep track of your debt payoff and to get an idea of how quickly you can pay off your debt.
As you can see below, our $300 credit card was our smallest debt.
Our minimum monthly payment was $30.
By adding the additional $200 to that $30 we were able to put $230 toward our smallest debt of $300.
*Remember, you can always put more money toward debt if you are able to! This will help you pay off debt faster and save you from additional interest!
As you can see, after we finished paying off our remaining $70 from our credit card, we took the remaining $160 and applied it to our next smallest debt.
Once we paid off our smallest debt, we were able to take the full $230 that we applied toward it and begin putting that money toward our next smallest debt.
Because our minimum payment for our next smallest debt was $100, that gave us a grand total of $330 to apply toward that debt. Once that debt was paid off, we had $330 to begin applying to the next debt in line.
Now we had racked up a huge debt snowball and it just rolled faster and faster.
By the time we got to our biggest debt it only took a little over a month to completely polish off that remaining balance.
When we were finished paying off debt in 6 months, we still managed to have an additional $210 leftover.
We were able to get debt free in 6 months and we found ourselves with an additional $930 a month!
Even if you skim off that additional $200, there is still a $630 surplus in our bank account each month!
Using the Debt Snowball to get out of debt definitely requires discipline, but has a huge payout if you can stick to it!
It has been over a year since we were able to dig ourselves out of this much debt in just 6 months and I am still amazed at how easy it really was and how great it felt to watch those numbers get smaller and smaller each month.
While we were able to get out of debt in 6 months, this isn’t going to be the case for everyone. Depending on the amount of debt you have, your income and your motivation, debt payoff will look differently for everyone.
There are a ton of debt payoff strategies out there these days, so how do you know if the Debt Snowball is the one for you?
My best advice is, if you struggle with impulse control and shopping addictions, then the Debt Snowball is the debt payoff method for you!
It works so nicely because paying off your smallest debt gives you the quickest reward — just like shopping — except in reverse.
You can use the printouts in this post and my Fun Sized Budget Bundle to help keep you visually motivated.
Don’t forget to join my Fun Sized Budgeters Facebook group to help keep you motivated, get advice from like-minded people and stay plugged
Some people truly believe that some debt is ok and it’s just a part of life. While it may sound harmless in theory, it can be detrimental to your finances and could really be holding you back from living out the life you really want.
If you are ready to take your finances seriously, join the waitlist to be the first in line to grab my Basic Budget Crash Course that will teach you how to plan a budget that fits your life, ditch your debt, save for the fun stuff in life and get more money without working more.
Great budgeting resources: