Have you ever heard of the debt snowball?
If you have multiple debts or credit cards, it’s a great method to get out of debt.
Here’s how it works.
1 – Start budgeting, and spend less than you make.
2 – Make the minimum payment amounts on your cards except for the debt with the lowest balance. That one, you pay off as fast as you can.
3 – Once you pay off the smallest debt, start using the amount you were paying on the smallest debt to the next smallest debt.
4 – Once you pay off the first two, use both monthly payment amounts to tackle the next. (Snowball)
5 – Keep doing this until all your debts are paid off.
By paying off the smaller debts first you get a boost of motivation that will wear off if you tackle the largest debt first.
Paying off debt is more about behaviour than math. Change your behaviour, change your results!