Top o’ the Mornin’ to Ya!
Baby Step Two is all about getting out of debt using the debt snowball method. This powerful technique helps you eliminate debt by focusing on behavior change rather than just math.
Here’s how it works:
1. List out all your debts from smallest to largest, excluding your mortgage.
2. Write down the minimum payment for each debt.
3. Pay the minimum on every debt. If you can pay more on the smallest one.
4. Attack that smallest debt with a vengeance, putting every extra dollar you can find towards it.
5. Once the first debt is gone, take the money you were paying on it and roll it into paying off the next smallest debt.
6. Rinse and repeat until you’re completely debt free!
Along the way, make sure you’re sticking to a zero-based budget where every dollar is accounted for. If you get a raise, don’t spend it – put it towards your debt!
The key is to stay crazy focused and celebrate each small victory, like paying off that first tiny debt. Let that momentum carry you forward.
If you’re struggling to make minimum payments, reach out for help. We need to stay in good standing and uphold our word by paying what we promised.
Imagine the freedom and peace you’ll feel when you’re finally debt free! That’s what keeps you going, even when it’s hard. And once you’re there, you can focus on building real abundance and making an impact on the world.
So sharpen your pencil, make that budget, and let’s attack that debt together!
Here’s a quick overview of the seven baby steps:
1. Save $1,000 for a starter emergency fund
2. Pay off all debt (except the house) using the debt snowball method
3. Save 3-6 months of expenses in a full emergency fund
4. Invest 15% of household income into retirement
5. Fund kids’ college education
6. Pay off the home mortgage
7. Build wealth and give generously
You be blessed!
Financial Peace – Baby Step 2: Pay Off All Debt (except for the house) Using the Debt Snow
