Choose the debt you’d like to pay down first. Financial experts typically suggest starting from the smallest debt and working your way up. You can also choose to start with the debt that carries the highest interest rate. Either way, once you’ve paid down the first loan or line of credit, you’ll move onto the next and continue to work your way through all remaining debt until you’re completely debt-free.
For now, paying off this debt will be your top priority. Be sure to pay the minimum payments on all other debts, but any extra money you have at the end of the month goes toward the first one. Start with the minimum payments you were making anyway, and add the money that was previously going toward setting up your savings account to create your debt snowball. Whenever possible, try to add money to your snowball to accelerate your progress. Click here for a visual.
Doesn’t this feel great? You’re on your way to a debt-free life!
Need help? Meet with our free, on-staff financial counselor for more suggestions on how you can pay down debt. Call today at 330-364-8874 and ask for Katy Steinebrey.
Need budgeting tools? Check out our interactive library through Banzai by clicking here.
Available Articles in the Financial Freedom Series:
Step 1: Take Stock of Your Debt
Step 2: Don’t Dig Yourself Deeper
Step 3: Negotiate a Lower APR
Step 4: Create an Emergency Fund
Step 5: Create a Budget
Step 6: Trim Expenses
Step 7: Create A Debt Snowball
Step 8: Boost Your Income
Step 9: Put All Windfalls in Your Snowball
Step 10: Make It Automatic
Step 11: Track Your Progress
Step 12: Celebrate!