Since March 2017, our family has paid off over $20,000 of debt (as of July 10, 2017)! We’ve done this using the Debt Snowball method from Dave Ramsey’s book, The Total Money Makeover. We’re in month 4 of 24 in our debt-free journey and hoping to be consumer debt-free in March 2019, an aggressive goal.
How To Get Out of Debt Using a Debt Snowball
- List all debts from smallest payoff balance to largest payoff balance, regardless of interest rate. This isn’t about math, it’s about behavior modification and creating momentum to get you through the journey.
- Make minimum payments on all debts, and pay the maximum your budget allows on the smallest debt until the smallest debt is paid off.
- Add the minimum payment you were paying on the first debt, to the next smallest debt’s minimum payment.
- Repeat #2 & #3 until all debt is paid!
Our Debt Snowball
As you can see above, we are on debt 6 of 8, as of July 9, 2017. The last big 3! The Debt Snowball Method is our attack strategy out of debt, and it works. In fact, seeing the numbers go down, makes us motivated to throw more money into the snowball each month. Every month, we get more gazelle intense – fighting crazily for our lives, running from the cheetah (debt) to financial freedom.
The two most asked questions we receive on our Instagram posts are how we started our journey and to share the spreadsheet for our Debt Snowball. We’re happy to dish! We started our journey by reading The Total Money Makeover, and here’s the link to a copy of our Debt Snowball spreadsheet on Google Sheets.
In the comments below, let us know how you started your journey.