It’s the season for cold weather and snowballs. Those lovely white flakes reminded me of a great tip for getting out of debt in a timelier manner; The Snowball Plan.
Many people have more than one credit bill to pay each month. There are credit card bills, car payments, student loans, and medical payments to name a few. A lot of people plan their monthly budget around these bills and look forward to the day they pay one off.
A good tip, I learned recently, is to keep budgeting for a bill even after you pay it off. You can then apply this payment to your next highest debt. For example; say you make a $400 a month car payment and in a couple months you have it paid off. Instead of increasing spending in other areas knowing you have more flexibility in your budget, keep budgeting as if you have that payment to make. You can then put that $400 toward your monthly student loan payment or monthly credit card payment. Once you pay off that bill as well, snowball the payment on to your next bill.
If you don’t adjust your spending habits when you have that little extra money left in the budget, you’ll never miss it. And, you’re guaranteed to get out of debt a lot sooner. I know you’ll really enjoy having all the extra money in your budget once all your debts are settled.