Paying off debt with the "Snowball Effect"
By soooobored
@soooobored (1184)
United States
November 8, 2008 9:37pm CST
Hey, I've recently become very active in trying to find proactive ways to deal with my debt. Personally, mine was accrued while in college. I keep waiting to get into that easy period, when paying off minimums isn't a huge challenge. I'm finding that time isn't coming!
I found this incredibly helpful website: http://consumerist.com .
There is one particularly helpful tip I found while snooping around here, and here is a link to it: http://www.vertex42.com/Calculators/debt-reduction-calculator.html
I downloaded this for myself, and it is SO COOL! It is a free spreadsheet (I think you have to buy it after sixty days, but if you find it works for you it is totally worth it). It helps you figure out the order to pay off your debt so that you pay the least interest. You can choose from two options: high interest first, or lowest balance first. What you do is decide a figure that you can spend on your debt, eg $300/month. Say your monthly minimum payments are $200/month, it shows you exactly where to apply that extra money and automatically calculates exactly WHEN you will be done paying off that debt! It's totally awesome, and I hope it helps some people.
If you try this, respond and let me know what you think! If you have a similar tip for helping reduce debt, or at least feel proactive in facing debt, let me know!
1 person likes this
2 responses
@unusualsuspect (2602)
• United States
9 Nov 08
When I had a lot of hospital and doctor bills a few years back, I paid a little to each one, but concentrated on the smallest ones first. As soon as I got one paid off, that money got added to the payments of the next one. The biggest one was going to take a long time to get off my back, no matter what I did, and I knew that getting the little ones out of the way would make it seem less hopeless. It felt very good each time I finished paying off one of those bills. It sounds to me as if the method you're using could be very helpful. I read Consumerist almost every day. It's a good site.
I also wrote about this method a couple of days ago on my blog. It's at http://gettingbacktobasics.today.com if you're interested.
@soooobored (1184)
• United States
10 Nov 08
Thanks for the link, I'll check it out!
Yeah, the spreadsheet pretty much describes what you do already, I like it specifically cause it shows you the total effect. I definitely want to get started making more than my minimums now that I see how effective it is!!
@fit4lifein07 (719)
• United States
11 Nov 08
I love these websites! thanks for sharing your information, I have been making extra money online with my blog I have been doing surveys and other types of programs to earn money if you are interested you can view the link in my profile, i have been trying to pay my debt off also, I have been doing the websites like I mentioned and have been selling on ebay and ecrater, I find spreadsheets helpful also, I just downloaded the one you listed but I also create my own it's very easy and it's good to keep track of expenses also, if you want to save more money you can look for coupons and free samples online i listed some on a website i made, if any of you have any more tips please let me know!!
