The Debt Snowball: How and Why this Method Works

Take just a few minutes to think about your debt—really think about it—and you’ll no doubt begin to feel overwhelmed.

It’s weird, isn’t it? You might spend years swiping credit cards and signing for loans without a moment’s hesitation. And then one day you wake up with a gasp and a realization:

I have to get rid of all this debt!

But like most things that take time to build up, paying off debt doesn’t happen overnight. Thankfully, you’re not alone. Plenty of folks in the EveryDollar community have been right where you are.

And we’re here to offer you the best method for getting rid of debt faster and easier than you ever thought possible: the debt snowball.

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Have Student Loans? Here’s How to Get Rid of Them

Do you remember walking to your first college class? The buildings in front of you held so much potential—the opportunity to learn new things, meet new people, and grow in knowledge of yourself and your chosen major.

Four years later (or so . . . ahem) you graduated.

And as you walked across the stage, posed for a picture, and looked out over a room of applause you no doubt experienced a familiar excitement for the future. Only this time you weren’t limited to just your campus. You could do whatever you wanted to do and go wherever you wanted to go!

The world was yours for the taking! That is, of course, until you got your first student loan bill.

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8 Tips From EveryDollar Budgeters on How to Pay Off Debt This Year

You’re sitting down to make your monthly budget, and there it is: that big, ugly category called debt. You know the one. It takes up an annoying amount of space in your budget. And boy, do those payments add up!

Imagine what your budget would look like if you didn’t have debt. Think about how much you could give, save and spend.

It may sound too good to be true, but tons of people are paying off their debt and taking control of their paychecks. And you could be next!

We asked some of our EveryDollar budgeters for their tips to paying off debt, and we couldn't have said it better ourselves! Here’s what they had to say:

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The Fastest Way to Get Rid of Your Student Loans

More than one in 10 Americans are still paying for their college degrees.

According to the 2016 survey by the National Foundation for Credit Counseling, 39% of those polled said they weren’t able to save for emergencies because of their student debt. And 30% said they couldn’t save for retirement.

There’s a lot you can’t do while you have huge student loans. But there’s even more you can do once your entire paycheck belongs to you again. You can save more, give more, and cook less. Hello sushi Fridays!

Get to the good stuff faster by losing your student loans with the debt snowball. It’s worked for millions of people, and it will work for you too! Here’s how:

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What Debt Do You Pay Off First?

It’s a common question when paying off debt—Should I pay the debt with the highest interest rate first since it costs me the most money?

Short answer: No. But we’ll explain. It’s best to start with the smallest balance. Here’s why.

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Create a Game Plan for Attacking Your Debt

Paying off your debt is a lot like scoring a game-winning touchdown. You start with a solid plan and end with an over-the-top victory dance.

Whether you’re a beginning budgeter or you’ve been budgeting for years, everyone tackles debt the same way: one yard at a time. So get out there and start running!

Here are three straightforward steps to help you pay off your debt once and for all.

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How to Pay Off Debt Faster (and Easier!) Than Ever

Want to move from good to better to best in your finances and actually pay off debt fast? You can do it! But you have to draw a line in the sand.

That means no more mindless spending, way less eating at fancy restaurants, and no more swiping credit cards. In order to take control of your budget and make the most of your income, you have to get serious about your good intentions.

Our hope is to pair your good intentions with our proven strategies to help you pay off debt quicker and easier than you ever thought possible. Below you’ll find step-by-step instructions for assessing and attacking your non-mortgage debts, tracking your progress, and staying encouraged along the way.

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