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Snowballing Debt: Illustrated and Explained (ish)

Snowballing Debt: Illustrated and Explained (ish)


I believe that the biggest thing I can do to reduce my debt in 2019 is to adopt the snowball method.

What’s the first thing you usually do when you pay off a debt? For me, I usually celebrate/pat myself on the back, which is GREAT. Then I start calculating what I’m gonna do with the ‘spare cash’, which is BAD. In months one and two I tend to use that cash to treat myself to something that I don’t really need. Then by month 3 that ‘spare cash’ has been absorbed into my usually spends and before I know it, the fact that I used to have £XX per month dedicated to particular bill is a distant memory that I choose not to recall.

The snowballing method gets rid of that ‘spare cash’ mentality and encourages you overpay on any existing balances. Because really, whilst you’ve got debts to pay back ‘spare cash’ isn’t really a thing. It’s not to say that you should be living on an overly tight budget, however if you’ve got a comfortable amount to live off month-by-month you should be able to stick to that and not increase it because one payment plan has ended.

When you pay off one card, loan or purchase it simply makes sense to plug those funds into the next one to pay it off quicker. Once you’ve paid off all high interest loans, cards and purchases, then you can start thinking about what to do with the surplus cash you suddenly find at your disposal.

To see how the Snowballing method would actually work for me, I had to get my excel spreadsheet out and start whacking in some formulas. Below is an illustration of what it could look like for you

Snowballing debt.PNG

The pale blue indicates the minimum payments - whilst the darker blue shows the payment snowball

As you can see, there may be months where your snowball can be split across two debts as one balance comes to an end

Things to think about:

  • Make sure you keep up with your minimum monthly payments across all of you balances

  • If you can dedicate a bit more income to your debt at the start, that will be really helpful - even an extra £10 per month will get the Snowball rolling bigger and faster!

  • You’ll need to factor in any ongoing interest and or charges to your final balance.

  • I’m not an expert, just a gal trying to get her shit together and sharing along the way


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