Anyone heard of this? It was made by Dave Ramsey I guess.
Basically you pay your smallest debt bill first then when it is paid you roll that over to your next bill. Your "snowballing" the money to the next bill. You of course make the minimum payments on each bill though.
Example:
Bill 1-450 (medical bill)
Bill 2-2500 credit card
Bill 3- 6000 car loan
Etc
Etc
Etc
So if your paying $50 a month on your medical bill and $100 a month on your credit card bill. Well when you get done with your medical bill you snowball that 50 onto your credit card bill. Now your paying $150 on the credit card and say $200 a month on your car loan. Maybe you can scramble another $50 a month on your credit card so now your at 200 a month. Well when your credit card is paid off you snowball that $200 to your already existing $200 car loan. Which would now be $400 total. Meaning you would pay it off quicker actually.
Obviously if you have a 0% apr on the credit card for 18 months or something it would make sense to try and hit that harder than normal.
With the "Debt Snowball Plan" your paying the smaller bills instead of the long huge bills. It helps because your actually accomplishing goals. Instead of a 6 year hiatus of trying to pay the car loan you can knock out 10 smaller bills and then have a huge "snowball" for the huge bills.
Me and the GF are going to try it. It can't make it worse than the absolute minimum payments we pay now.
We have a lot of smaller bills (3k or less) and just the school loans which are the biggest ones. Hers 19k....mine 7kish.
There's no reason why we can't knock out the 3k and under bills in a years time. Maybe ill throw the list up here so you can see what I'm talking about.
Anyone heard of this?
Basically you pay your smallest debt bill first then when it is paid you roll that over to your next bill. Your "snowballing" the money to the next bill. You of course make the minimum payments on each bill though.
Example:
Bill 1-450 (medical bill)
Bill 2-2500 credit card
Bill 3- 6000 car loan
Etc
Etc
Etc
So if your paying $50 a month on your medical bill and $100 a month on your credit card bill. Well when you get done with your medical bill you snowball that 50 onto your credit card bill. Now your paying $150 on the credit card and say $200 a month on your car loan. Maybe you can scramble another $50 a month on your credit card so now your at 200 a month. Well when your credit card is paid off you snowball that $200 to your already existing $200 car loan. Which would now be $400 total. Meaning you would pay it off quicker actually.
Obviously if you have a 0% apr on the credit card for 18 months or something it would make sense to try and hit that harder than normal.
With the "Debt Snowball Plan" your paying the smaller bills instead of the long huge bills. It helps because your actually accomplishing goals. Instead of a 6 year hiatus of trying to pay the car loan you can knock out 10 smaller bills and then have a huge "snowball" for the huge bills.
Me and the GF are going to try it. It can't make it worse than the absolute minimum payments we pay now.
We have a lot of smaller bills (3k or less) and just the school loans which are the biggest ones. Hers 19k....mine 7kish.
There's no reason why we can't knock out the 3k and under bills in a years time. Maybe ill throw the list up here so you can see what I'm talking about.
Anyone heard of this?
