How to Use the Snowball Method to Eliminate Debt

Step-by-Step Guide

1. 1

   Step 1: Gather all of your debt information.

   You'll need to know the total balance, interest rate and minimum payments due. , The more you are able to set aside, the quicker you will become debt free.
   
   You can adjust this amount on a month to month basis if needed.,, Pay the remaining amount of your debt repayment funds on your smallest debt.
   
   Example: $500 for debt payment Car payment: $200 minimum payment, balance $5,000 Credit card 1: $50 minimum payment, balance $6,500 Credit card 2: $60 minimum payment, balance $7,000 Paying only $110 on the credit cards, take the remaining $390 and pay the car payment. , Continue this method until all of your debts are fully repaid.
2. 2

   Step 2: Decide how much of your income you can set aside each month to eliminate debt.

3. 3

   Step 3: List your debts in order of smallest to largest.

4. 4

   Step 4: Pay only the minimum amount due on all of your debts except the smallest one.

5. 5

   Step 5: When the smallest balance is paid off

6. 6

   Step 6: repeat the process with the next smallest balance.

Detailed Guide

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