First and foremost, thank you for your time. I’ve foolishly got myself into a lot of debt.

Important Facts
•I work in an industry that my credit is a factor to keeping my employment -I can’t claim bankruptcy, I can’t let things go into collections
•Per my employment agreement, I cannot have a second job
•I have a $1,000 emergency fund
•I can’t get approved for a debt consolidation loan and I have no co-signer to help

Debts
Credit Card Debit $15,250
Auto Loan $15,667 (4yrs remain)
Student Loans $11,102

Monthly Income $2,480

Monthly Expenses
Rent $400
Credit Card Minimums $539
Cellphone $33
Car $347.00
Car Insurance $103
Internet/Cable $81
Utilities $125
Student Loans $120 (don’t have to pay till May) Nails $80 (optional can cut)
Gas $160
Groceries $300
Total: $2,287

Remaining $193

Really the only thing I can cut out, is my nails. Most of these bills are split with a roommate.
Will the debt snowball work for me or do I have too little remaining?
Any extra money I have, I plan on putting towards credit cards.
I appreciate any advice.
Thank you!

If the whole point of Debt Snowball is to pay off your smallest debt first, why not devote the full $1400 each month toward that credit card, and pay it off in 3 months?

The credit card's debt is $2,950 and the monthly income is $1,400 per month.

I’m struggling to pay off my credit cards. The balance isn’t even much but it seems like I can’t get ahead no matter what I do. I have one card with a small balance big interest and a card with a big balance and no interest for another year. Just trying to figure out the best plan to get this paid ASAP.

Consider this situation:

A person has $8,000 auto loan at 2.5% through their credit union and $20,000 in credit card debt at 24%.

The Ramsey Debt Snowball method would have you put every extra dime into the car until it is paid off while paying the minimum on the credit card. This would cost the consumer thousands of extra dollars.

Now if you called into the show he would probably tell you to sell the car, buy a "hooptie" and put the rest of the equity toward the credit card debt.

I disagree with this as well, because driving a $1,000 car has a whole lot more risk and hidden costs than driving a $10,000 car. It is likely to cost much more per mile driven in poorer fuel economy, more frequent maintenance costs, and time spent looking for a different car every couple of years. It could also make you lose your job if you are constantly missing work due to breakdowns.

So my two points are:

1. Paying off high interest rate loans first makes more financial sense than paying off small loans first

2. Paying a reasonable interest rate on a loan for a good, used modest vehicle makes more financial sense than paying cash for a junker.

Just wanted to share the good news with you guys. I’ve been reading the posts here for a while- Without the motivation from this sub and TMM, I would certainly be in even more debt.

A lot of friends have been very apologetic on hearing I’m moving back home but the truth is I’m SO excited for an opportunity to be closer to a debt-free life.

DEBT SNOWBALL METHOD

This video explains the fastest methods that you should use to get out of debt and get clear of mounting bills as quickly as possible.

Hi, so I am dedicating this next year to paying off my outstanding debt. I just moved back to my parents' house to achieve this. However, I'm kind of stuck on where to start first.

Currently, I have $8k outstanding on my car ($240 payment monthly), and $13.5k on a credit card (accruing about $150 interest charge monthly with minimum payment being about $260).

Also, I owe $1600 to my parents and have small medical debt of $400.

I know that it doesn't matter too much, but is there a better path for my situation. I feel like the credit card is bleeding me money every month, but Dave Ramsey stands by the Snowball method for getting some quick wins.

Any advice? Thanks in advance.

>What repayment strategy is most likely to motivate them to get them out of debt? Should they disperse payments equally across all accounts each month or concentrate payment on one account? Our research suggests that people are more motivated to get out of debt not only by concentrating on one account but also by beginning with the smallest.

https://hbr.org/2016/12/research-the-best-strategy-for-paying-off-credit-card-debt

A few of you may remember when I paid off my student loans a year and 2 months ago. In that post, I said, "Lookout next debt, here comes a snowball!" Well, it just blasted through our last debt moments ago. And now it's all rolling into our savings.

I'm posting this because; #1 we are excited and proud both coming from families with little money and terrible at saving, and #2 because we hope to inspire others to get out of debt and save. The biggest tools we used to accomplish this was a budget (used Google Sheets), reduce spending (ex. don't need 3+ streaming subscriptions), and save for a goal(s) (going to build our dream home).

Which one of these should I pay off first?

1. $1,422.08 at 4.290 %
2. $10,743 at 4.290%
3. $3,568 at 3.860%

Right now the majority of my payment is going to #2 automatically... It seems like it would be best to pay off #1 and #3 first because they are smaller amounts, right?

>“If you think nobody cares if you’re alive, try missing a couple of car payments.” — Earl Wilson

Whether it’s your wife’s spending habits at Starbucks or your recurring monthly subscription to Brazzers, it always feels like debt is so very easy to get into but so much harder to get out of. Often it can feel like you are simply treading water to keep from drowning in a sea of monthly payments and you feel like you will never get ahead. The bottom line is…

Debt sucks.

That being said, this post is not to make you feel like all debt is evil. Life happens and sometimes going into debt can’t be avoided (especially when you are young and starting a family in the military). But having a plan for getting out of debt is important. If you are like me, you want to pay off your debt as quickly as possible because you hate the feeling of having debt hanging over your head and seeing a significant chunk of your monthly paycheck disappear to pay off debt.

Pay off all your debt... the Heisenburg Way

Bottom Line Up Front

There are a variety of techniques for paying off debt quickly without having to resort to cooking and selling crystal meth, but the two most popular (but arguably less exciting) are the avalanche and snowball methods. While the overall concepts are similar, they are very different in their execution.

• In the avalanche method, you pay off your debt with the highest interest rate first. Once you have paid off this balance, you then begin paying off your debt with the next highest interest rate and continue the process until you have paid off all your debt. This is the financially optimal method of paying down debt, and you will pay less money overall compared to the snowball method. The downside is it can feel like it’s taking longer to pay off your debt, you become mentally frustrated, and give up.
• In the snowball method, popularized by Dave Ramsey, you pay down your debts in order of balance size, starting with the smallest. This is the psychologically optimal method of paying down debt because paying off small debts first make it feel like you are paying off your debt faster. It also improves your cash flow situation, as paid off debts free up minimum payments that can then be applied to additional debt. The downside is that larger loans (that may be at h

Hi all,

I have been putting myself to work over the last 6 months or so trying to pay down my credit card debt. I have poured over Dave Ramsey videos, read plenty about debt avalanche and debt snowball. I understand it and I like the idea of the debt snowball method. I have been attempting to follow Dave Ramsey's steps and I have managed to hack away $1k for an emergency fund, started budgeting religiously in YNAB and have been hacking away at my debt.

My debts are:

Credit Card - Chase United - Balance: $15,884/ Limit: $17,500 - 17.99% APR - $244 last month in interest

Credit Card - Barclaycard - Balance: $7,494/Limit: $8,800 - 21.74% - $141 last month in interest (PAID OFF! 11/28/2019)

Credit Card - Bank of America - Balance: $13,931/Limit: $15,000 - This is a balance transfer amount at 0% interest until January 2020 that will then go up to 20.99%

Personal Loan - Wells Fargo - Balance: $2,357 - 0% loan (furniture) (PAID OFF! 11/13/2019)

Credit Card - Chase Freedom - PAID OFF!

Credit Card - Capital One - PAID OFF!

2 cars - PAID OFF!

I have two questions:

1. Note that my Chase United and Barclaycard accounts are fairly close to reaching the credit limit. I know that the Ramsey method says to attack the lowest balance first, which is my 0% Wells Fargo loan in this case. However, I have not been able to add much additional cash each month to this payment because I have been making sure to pay the monthly interest on my Chase United and Barclaycard so that my balance doesn't fly up and hit my credit limit within a few months. Am I doing this ass backwards? Or should I just pay the minimum on those two cards and let those balances creep up toward the limit while I slaughter the Wells Fargo loan? What would happen if my monthly interest accrued causes a balance to reach the limit? Major fees?

2. I have an annual bonus coming my way in about a month; somewhere in the neighborhood between 8 and 9 thousand dollars (after tax). I've been struggling trying to figure out what will be my most effective strategy to apply this bonus to my debts. Does anyone have any suggestions? I plan to pay off the Wells Fargo loan first, then throw the rest at the Barclaycard balance, and with any luck, maybe I can kill two birds with one stone.

Thanks in advance for any help!

UPDATE:

1 additional question.

I have about $2k in company stock that consistently increases (around 800% over the last 10 years). Is it better to wipe this out and put it on the debt, or

I do contribute 15% to my 401k. Dave Ramsey says to throw everything at debt. Should I decrease my contribution for the sake of paying off debt quicker? My company matches and I save on taxes so I’m weary about not contributing into my 401k. Paying down the debt as quick as possible is my top priority though.

P.S. I’m not an engineer. I’m currently in production operations with decent opportunity to advance my career. 4 years experience. Bonuses are about 10% each year. Raises so far have been about 4%. Definitely considering going back for an engineering degree. But, is another $50-75k debt worth it?!

Dave Ramsey's snowball method says to attack your debt smallest to largest, interest be damned.

Most Credit Card interest is really high. My Amex is 17% and my Chase Amazon CC is 22%. I want to snowball my debt but Dave Ramsey says I should make the minimum payments on the CC's (high interest or not) that are the highest and begin attacking the lower balance cards first. Since I get paid every 2 weeks, should I be aggressively attacking my lower balance cards every 2 weeks, or should I only pay out when the balance is due, once a month?

Make roughly 3k/month. After bills and typical spending, I generally have 1000 left to either save or pay off debt with.

Debt: Credit card, $700, 0% interest. Minimum payment is $109 per month. This was a musicians credit card offering 0% financing for 48 months, for the record.

School loan, ~$1300, 3.15% fixed rate interest. Minimum payment is $43.97 per month.

Credit card, $3600, 0% interest. Minimum payment $36 per month. This was a 0% interest balance transfer promo. I believe I transferred two balances to this card at separate times, one of which expires in Jan 2020 and one expires in June 2020. My intention was just to transfer them to another card for the typical 3% fee to get 0% interest for another 12-18 months once the current promos expired.

Savings: $850. That is it. $850 in savings at the moment. Only future payment I know of is a $438 insurance bill at the end of October. I rent an apartment, so the only emergency I could imagine coming up is that my beater car takes a shit and I have to get another car, but I’m confident it will last till my next inspection in May.

So what should I do? Emotionally, I’m definitely more interested in using what I can from my savings and just quickly getting the two smaller debts off my back then starting to save, but I need to hear from an outside perspective.

Thanks

Here's a link to an image of the spreadsheet.

The credit card is in a 0% into APR until January of 2019, so it takes 1st priority. After that I went by balances from lowest to highest.

I used an amortization schedule calculator to determine the balances after each payment and rounded everything to the nearest whole dollar for simplicity. Because my student loans are actually split into 6 different loans each with different rates, I used a weighted average interest rate calculator to help simplify things.

The goal wasn't perfect accuracy, but rather to create a visual tool to motivate myself and make my debts feel more achievable. I made a copy of the spreadsheet and plan to fill in the cells with the actual amounts as they occur to compare to the estimated projections.

Doing this really helped make me feel less worried about my debts and got me excited for the future.

The snowball effect can be psychologically effective for paying off debts.

Screenshot: https://i.imgur.com/iE7o2Nj.jpg

Explanation with Download Link: http://lifeandmyfinances.com/2016/12/how-the-debt-snowball-really-works-free-tool-included/

My current loans I'm paying aggressively are: Care Credit card (major dental work): $647.57 @ 14.9%, paying $300 monthly (min payment is $45);

BMO Harris card: $4,064.25 (ugh) @ 11.24%, currently paying $100 monthly until Care Credit is paid off in August, upon which I will be paying $550 monthly;

and lastly, my car: $3,557.97 @10.54% (car was too old to get a lower rate; my credit is excellent) I am currently paying slightly over minimum at $200 monthly until BMO card is paid next spring then will be paying $750 monthly ($550 BMO payment +200 current payment).

Does anyone have any suggestions/tips/advice on how to go about paying this debt off in a different manner? Or does this method seem best? Would like to hear success stories if anyone has experienced debt freedom using this method.

I have three credit cards

1. 7,900 (min $200)
2. 5,500 (min $200)
3. 1,800 (min $40)

I never miss the monthly payments and try not to use them at all but between my income and bills all of my income is going to paying them and my rent/ car note / student loan payments. I can’t cut back on my budget but atleast if I consolidated I could get a lower overall interest rate than what I pay for 1 and 2. My credit is 690.

Update!! I am now down to only 1K!! Thank you for the feedback everyone!!

Hi All -

Posting from a new account for anonymity. I am embarrassed to rack up the credit card debt that I have, but I am on track to pay it all off in the next year or so. Essentially, when I lost my last job, I didn't budget properly and still lived the same lifestyle, leading to $20k+ in debt. I have a new job right now paying $78k a year, with a couple side hustles bringing in around $1500 a month.

All of my debts were on no interest promos up until this month.

My debt right now - AMEX - $15,382 (13.74% APR) Citi Card - $3,128 (15.99% APR) Discover - $2,804 (20.74% APR)

I've read a lot on the Internet saying to do the snowball method by paying off the smaller balances first...but wouldn't I want to pay off the higher balance first since it will inherently cause me higher debt? Are there any good calculators to figure out what is best to do to incur the least possible additional debt?

Thank you!

A debt snowball is when you pay your debts off in order of smallest to largest, ignoring interest rates.

Advantages

• It is psychologically beneficial. Paying off a $1,000 credit card eliminates an entire monthly payment, whereas paying $1,000 off a car just makes progress on paper. Sure your next bill will say you owe $7,000 instead of $8,000, but nothing has changed in your monthly expenses -- psychologically it feels like wasted money.

• When you pay off a debt, the amount you were paying towards it each month is an instant raise to yourself. If you pay off a loan that was $100/month, you suddenly have $100/month extra to budget with.

• Paying off a small debt instantly "adds" to your emergency fund. Your monthly expenses are now less, so you need less of an emergency fund.

• It wipes small debts out completely. If you stop paying off debts for whatever reason, you still have immediate benefits from your efforts because you've eliminated a few monthly payments. If a financial issue like a disability or long term unemployment comes up, you won't rack up interest and late fees on a debt that doesn't exist.

• Eliminating the number of payments you have makes it easier to keep track of them and not miss any or incur late fees. It's also psychologically better to have fewer debts you owe.

I'm aware that mathematically it is cheapest to pay it off in the order of highest to lowest interest, but I think that the benefits I listed out are worth paying a little extra interest for.

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Hello, Long time lurker, finally deciding to take my CC debt seriously. I am 40, married, a 2 year old son between us. She also has primary custody of my 13 yr and 9 yr old stepsons. Wife and I have a joint checking account to pay mortgage/utilities/internet/insurance on cars&vehicles/food/daycare etc.. Our Mortgage is a 15 yr, we refinanced in 2013 from a 30 yr when interest rates were 3% :) and we currently only have 71k left on it. We each have our own personal accounts for individual bills and spending money. I know that's not for everyone, but we rarely if ever argue over finances. We both work full time, she is also a part time student, and will be finished with her bachelors next year and will need to start paying on her loans. My Goal is to be able to help her as mush as possible at that point while also contributing to retirement. Here is a breakdown of my finances

Paid on the 1st/15th each month. $1298.26 take home each period

• My share of Joint Bills monthly $1375

• Cell Phone $33 (Boost)

• Netflix $9.99

• Playstation Vue $29.99 (NO CABLE/SAT TV)

• Term Life Insurance $32.12

• BarClays Online Savings Account $50 deposited each month

• Gas/Food $120 monthly

• Credit Card Breakdown: Please Note: I just applied for and was approved for a BOA credit card for 6k with 0% for 18 months. 3% transfer fee.

• Amazon/Chase:$3,355.00/4K 18.49% (this was a 0% transfer that just expired last month)

• Chase Slate:$628.03/1k 23.24% (0% offer expires Oct.15th)

• AMEX: $2,187.15/$3,300 17.24%

• Capital One Mastercard Platinum: $2,393.65 /$4,200 14.90%

• Discover: $1,409.33/$1,700 14.24%

• Citi Simplicity: $3,925.33/$5,100 13.24%

My plan is to transfer my highest interest cards to the BOA, which now that the 0% offers are ending will be the Amazon/Chase/and AMEX cards. I will only have a balance left of $170 on the AMEX. My primary question is how best to tackle the debt once I transfer the money. If I cut as much discretionary spending as possible, I should have an extra $300 or so to throw at the CC debt on top of the current minimum payments on all cards which total $343.09. So around $650 each month towards CC. Any advice is appreciated! I already used the unbury.us tool, but am still a little in the dark about which method is best for me to pay as little interest as possible.

I know the difference between the two strategies, but I was curious if anyone had first-hand experience where the psychological benefits of snowball were worth the extra interest paid.

How much did one method help your situation versus the other, and why do you feel it may be superior to the other method?

The two remaining credit cards I have both have a balance of $5000 that needs to be paid off and the interest rates are at 29% (because I was out of work for a year and couldn't pay on time ((edit))). Should I continue using the Snowball technique to pay off these cards, or should I try to open another credit card with a lower rate, and then balance transfer to work off the debt? Which path would be the best for me?