You may have heard of the debt snowball method of paying down credit cards. You know, the one where you focus your debt squashing efforts on your smallest balances first, eventually progressing to the bigger debt. This is the method I used to pay off nearly $40,000 in credit card debt. It’s a great system because using this method can result in earlier wins along your debt busting journey.
So how did I use the debt snowball method to pay off all $40,000 of my credit card debt? I focused my efforts on my credit cards with the smallest balances first. Why? I wanted gratification ASAP. Most people want gratification sooner rather than later. You can see this in play everywhere. For example, people pay for faster shipping, buy fast food instead of cooking at home, use their credit card to make a purchase when they don’t have enough cash to make the purchase. I’m no saint, I’ve been guilty of all of the above! I wanted to use the psychology of instant gratification to my advantage by front loading the low hanging fruit. And that’s exactly what I did.
Before you go playing in the snow, check out my other posts on freeing up your income. By reducing expenses and controlling your spending, you’ll have more money to tackle the debt snowball.
Debt snowball in action
I looked at all my credit card balances and listed them out from smallest to largest. I then reduced my payments close to the minimum on all cards except the one with the smallest balance. The money that was freed up by paying the minimum on my cards was directed to the card with the smallest balance; in this case, a card with $1,200. This allowed me to pay off this card much sooner compared to what it would take if I made higher payments on all of my cards.
Paying off this first card was a huge win for me as it meant one less payment that I had to make each month. It also gave me hope that I might one day actually pay off the mountain of debt I had accumulated. Alas, progress! Once this card was paid, I took the total amount I was paying toward it and applied it on top of the minimum payment I was making on the next card.
This process was repeated until all five of my credit cards were paid off. It took nearly four years but my gosh, the feeling of accomplishment grew with each paid off card. Over time, my stress level dropped and I was finally able to rest easy at night knowing I was in control of my financial destiny.
Conclusion
If you are looking to pay off your own debts, consider the debt snowball method. By focusing your efforts on tackling the smallest debts first, you can front load early success. These early successes will help keep you motivated on your journey to living a debt free life.
Remember, it’s easy to put off goals until next week or next month. That’s why so many people have goals but so few accomplish them. It’s what separates the doers from the dreamers. So don’t put off your goal of living a debt free life. Start and be free.
You can read more about the debt snowball method here.