The "Get Out Of Your Car!" Fund

Sunday, May 10, 2015

Can a debt snowball be overwhelming?

I was listening to an old Dave Ramsey talk show call in where a woman with 220,000 in debt said the debt snowball felt overwhelming. That's because she was looking at what she owes. DR told her that with serious lifestyle cuts, she could pay it off in 2 years, 3 years tops.

I don't know how long it will take her to pay it off. I know she's looking at the wrong numbers though. Don't look at how much you owe - look at how much you pay each month and how the balances decrease.

I know for me, I have paid off $8K in small debts and credit card debts, saved $10K for a used car, set aside $20K for house renovations, and paid down at least $5K in other long term debts. I've also managed to stay on top of my bills and pay for car breakdown needs, classroom needs, medical expenses, etc as I went instead of turning those expenses into debts. That's more than $40K towards debts/potential debts/savings in 20 months. I earn a lot less than the caller and her husband do.

Like DR said, you have to make serious sacrifices. Like another person said, you don't ease out of debt - you break out!

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