Does anyone know how to do the debt snowball.

Does anyone know how to do the debt snowball for Ramsey Classroom Chap 4 Les 6? I don’t know how to do the math part of it since I have no idea about the formula used.

Answer:

To do the debt snowball method from Ramsey Classroom Chap 4 Les 6, you can follow these steps:

  1. List all your debts from smallest to largest regardless of the interest rate.
  2. Make minimum payments on all debts except the smallest one.
  3. Put any extra money you have towards paying off the smallest debt.
  4. Once the smallest debt is paid off, take the amount you were paying on that debt and add it to the minimum payment of the next smallest debt.
  5. Repeat this process until all debts are paid off.

For example, let’s say you have three debts:

  • Debt A: $500 with a minimum payment of $50
  • Debt B: $1,000 with a minimum payment of $75
  • Debt C: $2,000 with a minimum payment of $100

You focus on paying off Debt A first. Let’s say you have an extra $100 to put towards debt repayment. You pay the $50 minimum on Debt B and the $100 extra on Debt A. Once Debt A is paid off, you add the $100 to the minimum payment of Debt B, making it $75 (original minimum) + $100 (extra from Debt A) = $175. You continue this process until all debts are paid off.

Remember, the debt snowball method is about behavior modification and motivation. It may not always be the most financially efficient method, but it can help you build momentum and motivation as you see debts being paid off one by one.

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