DEBT LIST & SNOWBALL‘EM!
The Debt List will assist you in compiling your debt. The Snowball column will help you prioritize the repayment of the debt.
The columns on the Debt List are as follows:
- Creditor—The one to whom the debt is owed.
- Interest rate—The rate charged for the debt.
- Monthly payment—The amount of the monthly payment. If payment is due more often than monthly, compute the total amount that is paid each month. If payment is due less frequently, determine the average monthly cost.
- Balance due—The amount of the outstanding balance.
- Snowball‘em—The priority of paying off the loans.
- Determine the snowball
Review Destinations 2, 3, and 5 from the Compass Money Map dealing with paying off debt.
Check off the debt you’ve already paid off. Then start to snowball the first debt you haven’t completely paid off. For example, if you’ve already paid off all your consumer debt in destination 3, but haven’t paid off your credit cards in destination 2, that’s where you’ll start: working to pay off your credit card debt.
Then snowball your debt: In addition to making the minimum payments on all your debts, pay off one debt at a time starting with the one with the lowest balance first. After the debt is paid off, apply its payment toward the next smallest one. After it’s paid off, apply what you were paying on the first and second debt toward the third smallest balance. That’s how to snowball your debt!