Debt can feel like a massive weight around your neck. It can limit your financial freedom, create stress, and make it hard to plan for the future. But there is a quick way to get out of debt. It is called the Snowball Strategy.
This method prioritizes eliminating the debt that can be paid off the quickest first. This builds momentum like a snowball rolling downhill. As each debt is paid off, the money that was used for that debt is then applied to the debt that can be paid off the next quickest. In this blog, I will teach you all about this strategy and how you can use it to break free from debt in 2024 once and for all.
The Quickest Way to Get Out of Debt
The Snowball Strategy can be particularly effective for people with a lower income. In a nutshell, here is how to put the Snowball Strategy into action:
- List all your debts, from smallest to largest. Include balances, interest rates, and minimum payments.
- Focus on paying the minimums for all your debts except the one that can be paid off the quickest.
- Throw every extra penny you have towards the debt that can be paid off the quickest. This could be spare change, side hustle income, or any extra room in your budget.
- Celebrate when you conquer the first debt! Redirect the freed-up money to the next smallest debt.
- Repeat steps 3 and 4 until all your debts are gone.
People from every walk of life can experience debt. For the purpose of this blog, we will explore methods to get out of debt if you have a lower income.
How to Get Out of Debt on a Low Income
To reiterate, the key is to start with debt that can be paid off the quickest first. By focusing on small debts first, you will see progress quickly, which can be motivating! It can also free up money to put towards larger debts.
For example, let’s say that the debt that can be paid off the quickest is your credit card. Every month, you pay $50 toward that account. Once that balance is paid off, you can apply that $50 towards the next debt.. This strategy continues until all debts are paid off. It is a straightforward, systematic approach to debt reduction that can work no matter your income level.
In the middle of your financial journey, do not forget about the tools that can guide you. The Debt Snowball course, our product of the month, is one such tool you can rely on. This course is specially designed to help you strategically eliminate debt from your life, paving the way for a future of financial freedom. Discover more about this Debt Snowball course here.
Your Snowball Strategy: Explained
Remember that snowball strategy that I mentioned earlier? I want to walk you through each step in a bit more detail.
First, you need to focus on creating a budget. This will help you identify how much money you have coming in each month and how much you are spending. Look for areas where you can cut back on expenses, such as dining out, subscriptions, and entertainment. Then, consider ways you can make more money, such as starting a business, part-time job, or selling unwanted items. Next, it’s time to move on to the third step.
Once you have created a budget, then you need to prioritize your debts. Write down the category, interest rate, minimum payment, and how long it would take you to pay each debt off using the minimum payment. Then, list them in order of which ones can be paid off the quickest.
If you have budgeted and listed out all of your debts, then you can begin to put every extra penny you get toward debt repayment. Do not overlook the powerful weapon that lies right in your pocket: your spare change. Every penny and dollar you make can be used to tackle your debt.
Getting out of debt takes time and effort, but it is worth it in the end. Stay motivated by tracking your progress and celebrating your successes. Set achievable goals for yourself and reward yourself when you reach them.
What to Do After Getting Out of Debt
Once you have become debt-free, the next step is to build wealth. This can be achieved by investing the money you were previously using to pay off debt. With no debt payments to worry about, you will be surprised at how much money you have available to invest. Whether you invest in real estate, stocks, or a business, the potential to grow your wealth is huge.
While the Snowball Strategy offers a quick way to get out of debt, you should focus on taking the journey to achieve financial freedom. After you have eliminated your debt, you can use the same determination and discipline to build wealth and create a secure financial future.
Every small action leads to big results that empower you to build wealth. If you embrace the journey and stay focused, God can do incredible things in your financial life. Thankfully, you do not have to walk on this financial journey alone. Next month, we have a team of experts who are all coming together at The WealthBuilders Conference to teach people like you how to reach their next level financially.
The 2024 WealthBuilders Conference is a great opportunity to learn more about wise investment decisions you can make before and after you get out of debt. It is also an opportunity to gain financial direction for 2024 and understand the power of divine connections. Join us at this conference to learn how to build wealth and advance the Kingdom of God.
By attending this conference, you will have the chance to hear from financial experts and successful individuals who have used their wealth to make a positive impact in the world. You will also gain valuable insights on how to achieve financial stability and security for yourself and your family. Click here to register now.