Day 7 - Snowball your payments and Dave Ramsey

Day 7: Snowball your payments

Day 7 - Snowballing your debt, is a good time to start talking about the Dave Ramsey total money makeover. As NCN talks about his day 7 of his ways of reducing debt, he is referring to what Dave Ramsey likes to call snowballing your debt. What he means is to start with your smallest debt and begin paying that off while making minimum payments to your other debts.

Here's a little of what mine looks like:
I have 4 credit cards, one with $450, one with 3900, one with 7700 and one with 11,000. On my lowest credit card with $450, I will pay about $50 per month for 9 months to pay it off. During that time on my other cards I will pay minimums of about $75, $150 and $250. When the first card gets paid off I will add that first payment to the second lowest debt to start making a $125($75+$50) payment. When that is paid off I will add that payment to the next lowest debt to make a $275 payment. As you see the payments get higher and the time to pay off the debt gets shorter. I believe it will be a great motivator.

I am hoping to pay off that first one soon and we will see how the snowball will work!! I am going to try and put any extra money I have into our debt. I already lowered my input into my 401k about $250 per month, so I am hoping that will help. I am also selling some things and getting a emergency fund started. We are getting what Dave Ramsey calls "Gazelle intense"! Hoo-Raa!