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Do you remember the old Donald Duck episode where Chip n’ Dale roll a big snowball down a hill that ends up going through Donald’s front door?  You can find this episode at the youtube link below from the 21:00 to 27:00 mark, but you if you want to just watch the snowball portion of the scene, you can find it at the 25:40 mark:

The debt snowball method is similar to this video: the snowball represents you paying off your debt, your debt payoff gaining momentum (snowball keeps growing) the longer it rolls.  The reason for this momentum gain is because a reduced debt load means reduced interest costs.  Since your budget from month to month stays more or less the same, having less interest cost means more money becomes available to pay off your debt principal.First, make a list of all your debts, starting from the smallest and working your way to the largest. 

Start by making minimum payments on all the debts except the smallest one, then work as hard as you can to get it paid off. This may mean selling something and using the money to pay it off, working some extra side jobs, and in almost all cases, significant personal sacrifice as shown in your monthly, written plan (i.e. the dreaded budget).

The snowball will grow as you knock off these initial debts: you no longer have to make the interest payment on that first debt, so that frees up a little bit of cash in the budget.  You then continue the same strategy: make the minimum payments on all debts except the smallest remaining debt, where you pay it off as fast as you can.  That should enable you to attack the next debt a little quicker than the first.  As the debt gets paid down, you’ll feel a sense of accomplishment and encouragement as you see the process working!

Dave Ramsey probably puts it a bit better than me: set a goal, write a plan, and choose to do it! 

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