Snowball your way out of debt in 2018, Plus a Coconut Snowball recipe
I cut up a credit card today! Yeah, celebrate! Treat yourself to something expensive, right?. . . Nope. Instead I sat down and made plans for the future.
Have you ever added up the interest you pay in a single month? We pay around $500 a month just to burrow money. I want to live a simple life. And that means it is crucial that I have little to no debt to live the life I love. I don't want to spend 60 hours a week earning tons of money, paying for a frivolous life. Personally, I want to spend my time doing the things I love, making very little money and spending very little money. Simple living. Sometimes debt happens though. So I've taken life into my own two hands and made a plan of action. No expensive financial accountant necessary. You can do this yourself.
Healthy Coconut Snowball Recipe
https://www.dessertnowdinnerlater.com/coconut-snowballs/
In November I paid off both of our smaller student loans. These loans cost us $40 a month, each. Our first thought was "hey, we have $80 extra to spend each month." NO! Take that $80 dollars and put it toward your next debt goal. My credit card (Goal #2) was $100 a month, but now I was paying $180. Now, in January I'm cutting up that credit card. Two big steps in just a few months. And now I am working on a new debt. And you guessed it, I'm adding $180 to that minimum payment. Just like a snowball on a wintery day, the amount accumulates as you roll it from one debt to another.
So let's take a step back. First make a list of all your debts. Student loans, medical bills, department store cards, credit cards, pet medical bills, auto loan, etc. Now arrange them so that the one with the highest interest rate is at the top of your list? This is goal number one. Pay the minimum on all of your bills except for this one. Focus on this one goal. Then when that one is paid off move on to your second goal.
Bonus step. You can do the math and figure out when each of your debts will be paid off or even when you will be debt free. It's super motivating. Of course, this is assuming your income doesn't increase and you are able to make extra payments. Or maybe consolidate debt or transfer to lower interest cards. There are lots of ways to speed this up. I should be able to pay off 1 of my debts in just a year and 3 more of my debts in an additional 18 months. But most amazing, I should be completely debt free (student loans, auto, mortgage, everything) in about 7.5 years.
Here's how it starts
Goal #3: 12 months at $272
Goal #4: 12 months at $181 , then 17 months at $453 ($272 +$181)
and so on.
Your finances are not out of your control. Instead of spending money on a financial advisor, spent some of your time researching and DIY. Make a financial plan of your own. Let your money work harder for you. You can find lots of articles and blogs centered around all things money on line.
Try reading this one from David Ramsey
https://www.daveramsey.com/blog/how-the-debt-snowball-method-works
Or check out The Budgeting Wife's Blog for a deeper explanation this topic and other great money saving tips, budgeting tips, grocery shopping tips, increasing income, etc:
https://thebudgetingwife.com/debt-snowball-v-debt-avalanche/
Tomorrow we'll get into something more fun: My Favorite DIY Project
Have you ever added up the interest you pay in a single month? We pay around $500 a month just to burrow money. I want to live a simple life. And that means it is crucial that I have little to no debt to live the life I love. I don't want to spend 60 hours a week earning tons of money, paying for a frivolous life. Personally, I want to spend my time doing the things I love, making very little money and spending very little money. Simple living. Sometimes debt happens though. So I've taken life into my own two hands and made a plan of action. No expensive financial accountant necessary. You can do this yourself.
Healthy Coconut Snowball Recipehttps://www.dessertnowdinnerlater.com/coconut-snowballs/
In November I paid off both of our smaller student loans. These loans cost us $40 a month, each. Our first thought was "hey, we have $80 extra to spend each month." NO! Take that $80 dollars and put it toward your next debt goal. My credit card (Goal #2) was $100 a month, but now I was paying $180. Now, in January I'm cutting up that credit card. Two big steps in just a few months. And now I am working on a new debt. And you guessed it, I'm adding $180 to that minimum payment. Just like a snowball on a wintery day, the amount accumulates as you roll it from one debt to another.
So let's take a step back. First make a list of all your debts. Student loans, medical bills, department store cards, credit cards, pet medical bills, auto loan, etc. Now arrange them so that the one with the highest interest rate is at the top of your list? This is goal number one. Pay the minimum on all of your bills except for this one. Focus on this one goal. Then when that one is paid off move on to your second goal.Bonus step. You can do the math and figure out when each of your debts will be paid off or even when you will be debt free. It's super motivating. Of course, this is assuming your income doesn't increase and you are able to make extra payments. Or maybe consolidate debt or transfer to lower interest cards. There are lots of ways to speed this up. I should be able to pay off 1 of my debts in just a year and 3 more of my debts in an additional 18 months. But most amazing, I should be completely debt free (student loans, auto, mortgage, everything) in about 7.5 years.
Here's how it starts
Goal #3: 12 months at $272
Goal #4: 12 months at $181 , then 17 months at $453 ($272 +$181)
and so on.
Your finances are not out of your control. Instead of spending money on a financial advisor, spent some of your time researching and DIY. Make a financial plan of your own. Let your money work harder for you. You can find lots of articles and blogs centered around all things money on line.
Try reading this one from David Ramsey
https://www.daveramsey.com/blog/how-the-debt-snowball-method-works
Or check out The Budgeting Wife's Blog for a deeper explanation this topic and other great money saving tips, budgeting tips, grocery shopping tips, increasing income, etc:
https://thebudgetingwife.com/debt-snowball-v-debt-avalanche/
Tomorrow we'll get into something more fun: My Favorite DIY Project
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