Exjackly

When I build a snowman, each part is built separately by starting with a small snowball and rolling it around the yard until it is big enough. Then I stack all of them together and decorate to create my finished snowman.

Snowballing debt is a very similar process. You start out making small extra payments on a single debt. Then, when that debt is cleared up, you take that extra payment plus the money freed up by eliminating the first debt and apply all of it to the second debt.

This extra payment for the second debt is bigger than the extra payment on the first debt. As you eliminate more debts, the extra payment amount becomes bigger every time. Eventually all of the debt is eliminated and the money is available for spending however you see fit, without incurring any new debt.

The freedom that comes from being debt free, as No Credit Needed tells us, is enormous. I agree, although I am not completely debt free at the moment, I have gotten much closer and been able to eliminate some debts completely. For an example of using a snowball, please visit NCN's post about the snowball.

The process that I have followed is slightly different than the standard snowball suggestion. I was fortunate enough to have enough of a credit limit on my lowest rate debt that I could consolidate all of the debts I wanted to eliminate first into that single creditor. Now, I have a single location to go to check the status of my debt reduction process. Plus, there are no questions where each extra dollar I come up with for debt reduction is going to go.

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