Snow is something we Californian’s don’t have a lot of experience with. However, we’ve all probably been in a snowball fight or we have built a snowman at some point in our lives. We figured out that we can make a tiny bundle of snow and then roll it around and it will continue to grow. This same technique can be applied to paying off debt.
The debt snowball works like this:
- Write out a list of your debts from smallest to largest
- Make the minimum payments on all of your debts, except the smallest
- Pay as much as possible on your smallest debt
- Repeat until each debt is paid in full
Sticking to the Plan
By eliminating the smaller debts first, you see faster progress and this inspires you to keep moving forward. A 2016 study in Harvard Business Review came to the conclusion that people who pay off smaller debts first are more likely to stick with the plan until their debt is paid in full.
If your debt is insurmountable and the snowball method won’t cut it, contact your Modesto bankruptcy attorney.
Categorized in: Debt