Get Out of Debt with the Debt Snowball Plan
The famous American financial author Dave Ramsey has suggested Debt Snow Ball method to Get out of Debt. We can also apply the same principles in India also.
The math seems to lean more toward paying the highest interest debts first, but According to Dave Ramsey personal finance is 20% head knowledge and 80% behavior.You need some quick wins in order to stay pumped enough to get out of debt completely. When you start knocking off the easier debts, you will start to see results and you will start to win in debt reduction.
Myth: I should pay off the debt with the highest interest rate first to get out of debt quickly.
Truth: You should pay off the smallest debt first to create the greatest momentum in your debt snowball.
daveramsey.com
Debt Snowball Plan
The principle is to stop everything except minimum payments and focus on one thing at a time. Otherwise, nothing gets accomplished because all your effort is diluted. First accumulate $1,000 cash as an emergency fund. Then begin intensely getting rid of all debt (except the house) using my debt snowball plan. List your debts in order with the smallest payoff or balance first. Do not be concerned with interest rates or terms unless two debts have similar payoffs, then list the higher interest rate debt first.
Paying the little debts off first gives you quick feedback, and you are more likely to stay with the plan. Keep stepping up to the next larger bill.
The famous American financial author Dave Ramsey has suggested Debt Snow Ball method to Get out of Debt. We can also apply the same principles in India also.
The math seems to lean more toward paying the highest interest debts first, but According to Dave Ramsey personal finance is 20% head knowledge and 80% behavior.You need some quick wins in order to stay pumped enough to get out of debt completely. When you start knocking off the easier debts, you will start to see results and you will start to win in debt reduction.
Myth: I should pay off the debt with the highest interest rate first to get out of debt quickly.
Truth: You should pay off the smallest debt first to create the greatest momentum in your debt snowball.
daveramsey.com
Debt Snowball Plan
The principle is to stop everything except minimum payments and focus on one thing at a time. Otherwise, nothing gets accomplished because all your effort is diluted. First accumulate $1,000 cash as an emergency fund. Then begin intensely getting rid of all debt (except the house) using my debt snowball plan. List your debts in order with the smallest payoff or balance first. Do not be concerned with interest rates or terms unless two debts have similar payoffs, then list the higher interest rate debt first.
Paying the little debts off first gives you quick feedback, and you are more likely to stay with the plan. Keep stepping up to the next larger bill.
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