Utilizing Debt Snowball Method to Manage Debt

Guest Post
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“Debt” is one of the worst financial crises that a human being can ever face. Statistics reveal that an Average American family carries a credit card debt worth $8,400 and over 40% of people actually spend more than they actually earn. If you are a victim of debt and wondering how to manage it, here is an effective way to come out of it or at least to tackle it.

The Debt Snowball method:

This method of debt repayment is mostly applied to revolving credits, better known as Credit Cards. Snowball method, spread by Dave Ramsey has helped people overcome one of their biggest financial crises of their lives. It is based on the concept that, paying off smallest debts first and then moving on to higher debt amounts will eventually lead to a faster recovery from debt. If you ask me, this has a psychological impact on the human mind. When the smaller amount gets paid off first, the person slowly starts to gain a confidence within him. He will feel the burden getting reduced slowly from his shoulders and sooner or later, he will see a ray of hope that may ultimately help him come out of the debt permanently.

Before we get into the debt management by snowball method, it is required that you understand and follow these key points given below:

  • Never add any new debt until you complete this process.
  • Also, concentrate or channelize your focus in one particular direction. In this way, you will be able to get results faster, else you will reach nowhere.

Now, How Do I?

The Emergency fund:

Prior to starting this process, keep aside a healthy sum of around $1000 as a disaster fund. Now, this money is not for you to repay your debt; this money is kept aside so that you do not suffer a further loss in the event of a worse crisis in the future. This amount will prove as a life jacket and will keep you afloat over the ocean of bad debts.

List it:

The second step towards managing debt using Snowball method is to list down all your debts starting from the lowest debt to the highest sum to be paid off. You can even add details about the interest rates to your list. While majority of the people have a misconception that dealing with higher sum will help in a faster recovery, Ramsey believed that paying off smaller debts first will help you understand whether you are on track with your plans and will give rise to corrective actions.

It’s all about going the extra mile:

Once, you’ve listed your debts, zero-in on the one which you wish to repay first. Stop repaying the exact amount specified on your due and try paying with some extra sum. Repaying with an extra sum will enable faster settling of debts. Take up a secondary job, in case you can’t afford to pay extra or you can even make money by selling off your old unwanted materials and things which may be useful to others. But, the most important thing in this stage is “Self Control”. Even if you can’t make that extra money, be sure that you don’t spend extra. Spending will once again put you in that vicious cycle.

Witness the momentum getting restored:

As you settle your first debt, you will experience a strange confidence within you. You will now be able to face the remaining debts with courage. Now, begin the process again by repaying the next debt by with that extra money you have in your hand. Repeat this process, stay on track, and you will eventually come out of it, very sooner. So, never lose hope, try hard and live a debt free life.

This is a guest post by Jem Larson of buyVerizon.com, a site that offers savings and current information on FiOS, as well as Verizon.com services.


  1. I keep telling my husband that we need to list everything out, and work up a budget for each pay period.

  2. That’s how I did it. I felt so good with every card I paid off that it motivated me to keep going. It took me 4 years to dig out, but I’ve never gone back and now I have a huge emergency fund in place as well.

  3. thanks for the tips!

  4. thanks for the tips 🙂

  5. Great tips. I swore off credit cards long ago and no longer have any debt.

  6. it’s so hard but taking it day by day and card by card is the way to go

  7. An emergency fund is so important. We had to dip into ours recently and I am glad we have it.

  8. This is great to create a starting point and keep from getting too overwhelmed.

  9. What great advice. We don’t have one credit card and truly only a little bit of debt. But we still live way beyond our paychecks and are working on that!

  10. Great tips! I would love to be out of debt. Sometimes I just keep praying I win the lottery because my student loan debts are outrageous!

  11. we used to have an emergency fun til we used it all for someone else’s emergency who thinks they don’t have to pay us back.

  12. I love this method!!! We learned all about this when we took the Dave Ramsey course.

  13. We’re slowly getting out of debt.. hubby racked it up pretty high. 🙁

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