Getting out of Debt - Snowball method

Step 1 - Sit down by yourself or with your partner... go over all of your spending habits from the last 3-4 months and see where your money is going.

Step 2 - Get a WRITTEN budget that gives your money purpose BEFORE the month begins. See where you can reduce spending and take note of what you have left over (even if it is a modest $20)

Cancel unused subscriptions
Take a packed lunch rather than spending $15 on lunch and coffee
Cut back or stop takeaways and eating out/ buying luxury items.

Step 3 - Write down your debts smallest to largest

Step 4 - Pay down the smallest debt first

If you have an extra $20 a month, chuck that as an overpayment on smallest debt

Step 5 - Once the first debt is paid down, take the minimum payment amount and the extra $20 to add as an overpayment on 2nd debt.

Minimum $10 + $20 = $30 extra on 2nd debt.

Step 6 - Repeat step 5 until and combine ALL previous minimums + extras until all debts are gone.

Debt 1 minimum $10 + Debt minimum $25 + $20 extra from budget = $55 overpayment on third debt... etc

Step 7 - RECOVERY - Keep your monthly expenses low, don't go back into old habits and start investing a portion of the money you had been using to pay off debts and the other portion to build a savings nest egg... this will stop you from pulling out the credit card the next time something needs to be fixed or replaced.

This is the best strategy for feeling like you are making progress! You will see the debts dropping like flies...

(Yes it may not work out as the best mathematically if you are looking at interest rates, but in the interest of getting and staying debt free, this has worked for millions)

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