Using the Debt Snowball can help us gain momentum in getting out of debt as quickly as possible. I point you to my article explaining how it works, link is below. As we cross off each debt, we gain a sense of accomplishment that increases our self-esteem. It really does make us feel freer as we realize we no longer owe others for items we have bought or used. So it is vital we write down all we owe on one page, from lowest amount to highest, so we can visualize our debt, then do all we can to pay each one and cross them off once and for all. And while this method can really work well, understand it still requires all sorts of self-control on our part.
A great way to lessen the temptation to get into new debt as we work on the Debt Snowball, is to cut up our cards. Mr Ramsey calls this “plastic surgery”! We not only have to remove the immediate accessibility of our plastic from our wallets, but also from our phones and programs that make it way too easy to to say, “just charge it!” Things like Apple pay, PayPal, Venmo and the like are very convenient, but apart from this self-control I am talking about, they can be very dangerous too. So “just cut them up” should be our new phrase instead. Remember you still have to close the accounts, which you can only do once they are paid off, but doing this as soon as possible, will keep us from accumulating new debt.
I want to just quickly mention the problem with consolidation loans before I go. First they are still debt, but the real problem is these programs can give us a false sense of security. While they sound good, putting all debt into one account with a lower rate, the problem is too many people will accumulate other debt somewhere else as they are trying to pay down that consolidated loan. So we gather all our debt into one account, but then continue to grow other debt in other places? This doesn’t help, it can hurt us instead.
Again, we must exercise self-control throughout this process of getting Debt Free. The process should be: stop using credit cards, use the Debt Snowball and get out of debt as soon as possible, then close all those accounts. Using our working monthly budgets and savings for any extra items we may need should be our way of staying out of debt. Again, self-control is the key.
<>< Peace, Diane
9-27-21 Effective Finances: Be Free- getting out of debt using the Debt Snowball
