Comments on: Debt Snowball Explained | How To Pay Off Debt Using the Debt Snowball

By: IRA Beneficiaries - How To Safeguard Yourself and Family

IRA Beneficiaries - How To Safeguard Yourself and Family — Wed, 02 Nov 2011 07:25:34 +0000

[...] Debt Snowball Explained – MH4C [...]

By: Chuck

Chuck — Mon, 09 Aug 2010 13:15:09 +0000

There is one other benefit to using the debt snowball method. If you pay off your smaller debts first then this provides a nice buffer in case “Murphy” comes calling. Example below:
Credit Card at 19% interest rate – $350 minimum payment
Credit Card at 18% interest rate -$150 minimum payment
Credit Card at 17% interest rate -$50 minimum payment

Lets assume you have an extra $100 to throw at the debt snowball. Going after the 19% makes good financial sense, but knocking out the smaller ones frees up money when things don’t go according to plan. So lets say you blow a couple of tires on your truck … you need $200 to fix it …. If you had already knocked out the smallest minimum payment and begun making progress on the second smallest you could possibly pay for the new tires without having to dip into your emergency fund. You would just need to pause your debt snowball and make the minimum remaining payments.

Just another thought … there are ways to play with this but the risk of “Murphy” showing up should not be discounted.

By: Carnival of Financial Planning – Edition #152 – July 30, 2010

Carnival of Financial Planning – Edition #152 – July 30, 2010 — Sun, 01 Aug 2010 22:57:51 +0000

[...] Ford presents Debt Snowball Explained | How To Pay Off Debt Using the Debt Snowball posted at Money Help For Christians, saying, “An introduction to the debt [...]

By: Gholmes

Gholmes — Thu, 29 Jul 2010 19:30:14 +0000

Definitely agree with setting a goal #3 and charting it in a worksheet. That was key for us and we posted the chart on the fridge where we saw it every day.

I’m the only math nerd in the family so the fact that we had small successes up front got the rest of the family emotionally involved. The celebrations after killing a specific debt helped with “sorry no dinner and movie out nights”. At the end all were on board and there were no sorrys only the fun of knocking off the debt.

By: Stacy

Stacy — Thu, 29 Jul 2010 05:22:40 +0000

This is exactly what I did. The hard part is staying of of debt. I am on my second go round. The only good thing about this it that once you have done it, you can do it again. I only have one more credit card to pay off. Yea Me!

By: Craig

Craig — Wed, 28 Jul 2010 18:54:32 +0000

@Money Obedience
I agree. In my case, the thing that would motivate me the most is paying off high interest payment. However, we aren’t all motivated by the same things.
@Forest
The snowball has too big bonus marks. Simplicity, as you mentioned, and a proven track records. At least in my circles most people who are getting out of debt used the snowball.

By: Money Obedience

Money Obedience — Wed, 28 Jul 2010 15:42:16 +0000

Different strokes for different folks. The debt snowball can work very well for some people and these people should use it. I know that it would bother me too much to keep expensive debt while I am paying off cheaper debt that is easier to pay off. I think it can also make sense to use a mixture. Pay off really small debts first and then tackle expensive debt. That way you get the emotional boost by getting rid of small debts right away, but it won’t cost you too much since you get rid of expensive debt before you get rid of cheaper but smaller debt.

By: Forest

Forest — Wed, 28 Jul 2010 07:57:54 +0000

Hey Craig, nice explanation.

I think simplicity is the key to the snowball…. When you knock off one card at a time you make your debt situation simpler each time. Paying off the biggest debt first means it stays complex for longer…. Of course the mental aspect of paying off one more debt is extremely important too.