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Personal finance

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is much bigger than numbers and interest rates. Getting Out of Debt - The Debt Snowball A little over a week ago we had a freak snowstorm here in North Carolina. I get this question
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all the time.
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I've worked with people who were able to throw thousands of dollars each month at their largest debts after they've gotten rid of smaller ones. But when you taste some victory by paying off a small debt you'll be invigorated to push forward and kick that next one out of your life.

It won't take long before you lose your enthusiasm and motivation. Just like a

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snowball for a snowman, as
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you pay off a debt and roll the funds into the next, your payments get larger and larger. I'm talking about selling stuff, tightening the budget to free up cash, and doing whatever else you can to kick that first debt out of your life for good. The first step to building a snowman is gathering up that chunk of snow that you can start rolling across the ground. While paying minimums on everything else, you
outdoor
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toys
attack the smallest debt with such a vengeance that it can do nothing but hit the bricks. The more you roll, the bigger the ball gets.
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Being a financial coach and certified nerd, I immediately linked the snowman process to dumping debt for good. We're talking about emotions and behaviors here.

Four inches later, all the kids in the neighborhood were in their yards sledding on trashcan lids and using beach toys to gather up the

toys
white stuff for snowballs. Remember, we've already discussed
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putting your foot down and being done with debt; your ferociousness can shine in all its ardene now. Thousands of others across the country have used this process to achieve debt freedom, so what do you have to lose. If the debt with the highest interest rate has a huge balance,
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it's going to take a while to pay it off. With the debt snowball, you list the debts from smallest payoff to largest. Once the smallest debt is
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gone, you take the minimum amount you used to pay on it and roll it into
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the payment on the next debt - along with any other funds you can free up. Some of the kids had never seen snow, but they all wanted to build snowmen.

That's a huge snowball rolling

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down hill,
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destroying every debt in its path. Before you know it, there's a real-life Frosty keeping watch over your home. Those kids were rolling snowballs all over the ground, delighted to see them grow larger
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and larger. Once that second debt is paid off, you roll its payment, the first debt's payment, and any other cash you can scrape together into the third debt. But, why wouldn't you pay off the debts in order of interest rate - from highest to lowest. I teach clients a process called The Debt Snowball for completely eliminating their consumer debt - typically in 24 months or less.



   















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