Lowering and Eliminating Debt

Debt is a scary word. Today’s economy makes debt even scarier with companies going belly up at the first sign of a scare. Your job is never safe. All your possessions and money are constantly teetering on the edge of safety. So what can you do to start lowering and eliminating your debt?

You’re staring at a large pile of bills, and they are all from debts that you owe to someone or some company. Or maybe you’ve set up your budget from the tips in my previous post and you’re looking at the large column of debts. Either way, you have more debt than you thought you had and it’s overwhelming. I get that.

Lowering and Eliminating Debt

Mr. H and I took our first long, hard look at our debts about seven years ago when Mr. H lost his job. Our primary (and majority) source of income was suddenly ripped out from under us. My head was spinning and Mr. H hit the calculator. We cut all expenses we could and Mr. H researched ways to save money and get rid of our debt.

If you’ve ever heard of Dave Ramsey, you’ve probably also heard of his debt snowball. Thankfully our debt was small, but the debt we did have needed to be taken care of despite our lack income. We took the snowball approach.

Lowering and Eliminating Debt


The snowball approach is a simple way to attack your debt. You start with your smallest debt. Any extra money you have left at the end of the month goes toward your smallest debt. The idea is to pay off your smallest debt as fast as possible. It will give you a small victory. When it comes to debt, any victory feels big, even if it is small.

Once you pay off the debt, you will take all your extra money plus the money you had to put toward the first debt onto your second smallest debt. You will continue this pattern until all your debts are paid off. Victory after victory and bigger and bigger progress as you go. It will feel good to have those papers stop showing up in your mailbox.

Lowering and Eliminating Debt

Don’t forget to continue making minimum payments on all your debts. You do not want to end up in a bigger heap of trouble because you missed a payment. That is a whole mess that I don’t even want to get into. Just don’t do it.

That’s it? Yes. It’s really that simple. Mr. H and I easily got out of the debt we had while he was unemployed by this system. You can do it too. It won’t always be easy, but it will be worth it to get rid of this burden.

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