Experts Agree: Snowballing Helps Getting Out of Debt Faster
What is snowballing?
It is term that means paying off your debt by making more payments on a specific account based on interest or balance.
How does it work?
Logic says that you should pay off your debts in interest order, which means paying the debts with the highest interest rate first, while continuing to pay the minimum on your other debts. Nonetheless, it's been noticed that others prefer to pay off their smaller debts first, regardless of the interest rate. This way gives people a psychological boost to move forward. Whichever way you choose, just make sure you stick to it.
What else can I do?
On top of paying the debt off because of interest rate order or balance order, be sure to double up on the payments. Can you afford to put an extra $5 per week out of your current income toward your goal of getting out of debt fast? It doesn't sound like much, but $5 can have a huge result on reducing your balances quickly. For example, if the minimum payment is $50 dollars per month, try paying the debt twice a month at $50 dollars each. It really takes a bite out of your debt.
Once you' finish paying off one of your accounts, add the entire amount you were paying off your first debt to the payment you are making on the next debt. This method should increase the amount you currently pay significantly, so your next balance will be paid in no time.