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When it comes to getting out of debt, there are a few ways to help. Once you find a way that works for you, stick to that method.
There are a few ways to get out of debt. The two most common are the snowball method and the avalanche method. You could also use the velocity method, but I don’t recommend that one to many people.
I know a lot of people look down on those who choose the snowball method. The truth is, we all work differently when it comes to our minds. While the snowball method may not make sense to some, it makes a lot of sense to others. When I help people get out of debt, I’ll take a look at their personalities to see which one is best for them as a recommendation.
One thing that I will say is that once you’ve picked a method, stick with it. The only time to switch is if you realize that you are on the wrong path.
Get focused when getting out of debt
The worst thing you can do is to keep switching between the methods of debt reduction available to you. This could lead to missing out on making minimum payments, and it could cause you to not get out of debt as quickly as you want.
Let’s say for two months you use the snowball method. You’re getting close to wiping out one credit card debt and then you switch to the avalanche method. Now you’re working on another debt for two months. Only, that one that was so close is still having interest put on it. Could you have cleared that if you stuck to the snowball method for another couple of months? Possible!
If you keep switching, you’ll find that you switch the credit cards that you’re paying off. This leads to not actually getting out of debt and ending up with more interest being put on your cards. Your credit rating suffers, and you end up more financially stressed.
When you’re focused on clearing your debts, you will find that they go down faster. You’ll see the balances drop, and you’ll be more motivated to keep going. It’s a huge weight off your shoulders.
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There are times that you should change your debt repayment method
There is an instance that you should switch your debt repayment method. That’s if you’re not getting out of debt with the current method because it just doesn’t work for you.
Let’s say you chose the avalanche method because everyone told you that you would save money. You’re clearing that debt with the highest interest rate. The problem is you’re not seeing the money go down all that quickly. You still need to put money on other credit cards, and it’s starting to stress you out. You’re more likely to throw in the towel and just rack up more debt.
It’s time to switch to the snowball method. Work on that smallest debt and clear it off. Let’s say that takes you three months. Now you’ve cleared that debt, and you have more money to put on another debt because it’s one minimum payment you can forget about. The credit card is cleared off. Now it’s time to turn your attention to the next smallest debt.
Do what works for you. If you’re finding the debt repayment method isn’t working, then switch. Once you see that it’s chipping away at the debt, you’ll get into a pattern. Now you just need to remain focused on getting out of debt.
MORE: 4 steps I got to get out of debt
Do you need help getting out of debt? Get in touch with me today to see how I can help.
