If you want to find an effective way of reducing your debt, follow Dave Ramsey's Total Money Makeover. One of the key strategies to the Total Money Makeover is the "debt snowball." Debt snowball is basically listing all your debts from lowest to highest balance. Pay off your lowest debt as quickly as possible while paying the minimum on all your other debts. After your first debt is paid off, start putting those payments toward your second debt in addition to what you were already paying down on your second debt. Thus, beginning your debt snowball. Follow the same routine with all your debts. Some may argue that you should pay down your debt with the highest interest first. The satisfaction of seeing results faster by paying off lower balance debts quickly with the Total Money Makeover is why it is so successful. When people don't see results fast enough, they get discouraged. It's human nature.
Dave Ramsey states you can take control of your debt using these steps.
|$1,000 to start an Emergency Fund|
|Pay off all debt using the Debt Snowball|
|3 to 6 months of expenses in savings|
|Invest 15% of household income into Roth IRAs and pre-tax retirement|
|College funding for children|
|Pay off home early|
|Build wealth and give!|
Invest in mutual funds and real estate
I just can't seem to do a routine or method exactly how people tell me to do it. (MODIFIED curly girl method anyone). I think I just can't be that strict because life itself isn't black and white. So many things come up. Other things I would rather do or spend my money on. What may work for someone, may not work for me so I need to change it up so that it WILL work for me. At the same time, I still can't do everything in excess. Any beneficial lifestyle change, no matter how small, is good. Even if you can't change everything all at once, positively tweaking how you live little by little will bring you success without feeling so overwhelmed that you want to give up.