Repeat until every single debt is gone.Once the smallest debt is gone, pack that payment (and the extra money) onto the next-smallest debt and pay it off.(We’ll dive deeper into this in the Tips for How to Pay Off Debt Faster section.) This includes the money you freed up when you were budgeting. Attack that one with all the extra money you can get. Make minimum payments on all debts-except for the smallest one.Remember the list of debts you wrote out? Put them in order from smallest to largest, ignoring the interest rates.It’s how you build momentum, because you’re paying off your debts in order from smallest to largest. Now that you’ve got your budget set, it’s time to start paying off debt! And the best way to do just that is with the debt snowball method. Right now! Cover all the essentials, cut out some extras (just for a season, so you can throw more at your debt!), and make sure you’re budgeting for your debt-payoff goal.Ĭheck out our EveryDollar Complete Guide to Budgeting if you want to learn more. You’ve got work lined up for that money: You’re paying off debt. And right now, you have no time for lost dollars. It’s how you tell every single dollar where to go so you don’t wonder where they all went. Look up all your debt balances and write them down.Ī budget is simply a plan for your money. And you will.īut first, you’ve got to know how much debt you have to fight. But listen, this isn’t a moment of defeat-it’s the first step to victory! You can defeat your debt. If you want to pay off your debt, you’ve got to face the truth of your total debt amount.
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