When starting to pay off your debt it is important to do a couple things to prepare for this task. It is not an easy task either.
Especially if you have been avoiding it. It is very eye opening and a life changing experience if done right. There are a couple of steps and tips to pay off debt fast.
One thing you should do is use a debt snowball calculator to help you determine how long it will take you to pay off your debt.
Before you can use the calculator you need to find all of your debt information including the balance, payment amount, and interest rate. Once you have that information, you can use a calculator and play with the numbers.
I used several different debt snowball calculators when I was paying off my debt. There were some that I liked more than others. It is definitely motivating when you use the snowball calculators to see how fast you can pay off your debt. You can actually see how long it will take you with paying the minimums and then different amounts for the extra.
But first, if you don’t know what the debt snowball is…let me explain:
Paying off your debt using the snowball methods means:
- listing your debts with from the smallest balance to the largest
- start paying minimum payments on everything but the smallest
- Put all extra money toward the smallest payment
- Once the smallest balance is paid off roll that payment and the extra to the next smallest debt
- Once you get to the last debt, all the payments and extra is going to the one debt to pay it off quickly
Studies have proven that the debt snowball method is the fastest and most effective method for paying off debt. It gives you the motivation and satisfaction of the quick wins and helps you change your behavior.
It has to suck enough that you learn from your behavior so hopefully you don’t do it again.
Being consumer debt-free is not easy. If it was, more people would do it. But it is so worth it. The debt-snowball helps you pay off debt fast and efficiently while changing your behavior.
It’s also how we paid off $45,000 in just 17 months while I was working as a police officer!
Ok now back to the debt snowball calculators.
The Best Debt Snowball Calculators:
I love undebt.it because it lets you run the numbers using several different payoff methods, including debt avalanche, snowball, or based on payment amounts.
The debt avalanche is focusing on paying the highest interest rate instead of the smallest balance. Usually, your payoff date will be the same if you stay intense but the if you use this method you are more likely to quit compared to the debt snowball method. That is because you don’t get the quick wins.
I love that it gives you a debt payoff date, an amortization table and shows you how much interest you will save! The only thing that is tricky with their calculator is when you put in the total amount toward debt, you have to include the minimum payments. It doesn’t do it for you automatically.
I used the same example for all the calculators. You can add as many debts as you need and it will calculate it for you.
Then it gives you the table and all the debt free date information below. I am a very visual person so this right here is why it is my favorite!
Then it shows you that individual date pay off dates. So, it shows you in details and then summarizes it for you. I think this is the easiest calculator to use and understand.
Notice that in this example, an extra $1000 a month, has it all paid off in less than 2 years!
I really like their calculator because it is very easy to use and visually it makes sense. I have tried some that are confusing. Their amortization table is visually easy to follow. It even calculates how much you will save in interest and how many payments you have left.
It only lets you do 10 debts so if you have more than that, sorry.
Here is what theirs looks like with my example:
Then it gives you a summary and they will even email it to you!
Then they give you the amortization table.
They do the debt snowball for you. Be sure to list your debt smallest to largest because it will not do that for you. It will list whatever you list as number 1 first in the snowball.
Notice in the above example that the extra is added to the payment for debt #1. At payment #7, what is left is applied to debt #2. Then at payment #15, it is applied to debt #3.
Then you add in how much extra you can throw at your debt. Play around with the numbers. Try it with the minimum, then what is left in a normal month. Then starts seeing how fast by cutting expenses, working extra, and selling things. Trust me, when you actually see it, you will want to do it as fast as possible.
I like this one for one feature that Financial Mentor doesn’t have and that is comparing the debt avalanche to the debt snowball when you input your numbers. You can also add in more than 10 debts. It also gives you a debt free date.
I used the same numbers as the examples above.
Here is the summary:
I also like that it gives you an actual debt free date. Then when you play with the numbers, you can see the date change. You can easily see in this example how much faster you can pay off your debt using the snowball method compared to minimum payments.
In this example you would save over $13,000 in interest and 13 YEARS!
It also tells you the order in which to pay them based off your selection of debt avalanche or debt snowball. It then summarizes each debt and tells you how much you would save and the debt free date for that debt.
The only thing I don’t like about it is that it doesn’t give you an amortization table.
There were several calculators that I did not like, including Dave Ramsey’s! I know that’s a shock but he requires an email address to see the results. It also didn’t require much information to calculate, so I can’t imagine it is very accurate.
I also usually love Bankrate.com and their calculators but I tried the debt snowball calculator and I did not like it. It doesn’t give you all the detailed information as these other calculators.
Debt Pay Off Success Stories:
When I was paying off debt I would read other people’s success stories to help keep me motivated. So, when I started this blog, I wanted to help motivate others by sharing success stories.
Here are some of those debt pay off stories:
Here is my story about paying off $45,000 in 17 months! We had a credit card from taxes that came due, a car loan, and my student loans.
Read our story here:
Another story I have shared is how Stephanie and her husband paid off $70,000 in 12 months! They were intense and worked a ton to get it paid off FAST!
Read their story here:
Another one is about Ashish and his wife that paid off $130,000 in less than 2 years! They were both doctors BUT they still had to be intense and intentional. They could have just as easily given into a doctor’s lifestyle and added to their debt instead of paying it all off.
Read their story here:
Tips for Paying Off Debt Quickly:
In the above examples, I applied an extra $1000 a month to the debt snowball. This cut the debt free date from 14 years to under 2 years! Remember this is only temporary and can be done.
Think of ways to come up with an extra $1000 a month. Remember the more money you can find, the faster you will be DEBT-FREE!!
Here are some ways to do that and may be even more!
Make A Budget
Making a budget is the foundation for success for paying off debt and saving money. This will be an eye-opening experience even if you think you have a general idea of where your money is going.
If you aren’t tracking every dollar, when you do, you will be shocked. I know I was. I have always had a budget but when I sat down and actually saw where all our “extra” money was going I couldn’t believe it!
Learn more on how to make a budget.
Cutting expenses is like giving yourself a raise. There are several ways to cut expenses or save money that are easy and quick to do.
You can evaluate your cable package and either reduce channels or cancel altogether. Cancel insurance plans you may not need. For example: cell phone insurance, whole life insurance (have term life insurance in place before canceling), lower data limits on cell phone plans, and look for more ways to save.
You can also check out my e-book; 200 easy ways to save money everyday. I have listed out numerous ways to save money.
Make Extra Money
In the above examples, I applied an extra $1000 a month to the debt snowball. This cut the debt free date from 14 years to under 2 years! Remember this is only temporary and can be done. Think of ways to come up with an extra $1000 a month.
Some ways to come up with an extra $1000 including getting a part-time job. You can deliver pizzas, drive for Uber, work online, clean houses, and so many other things.
If you can save money by cutting expenses then that is even more that you can add to the snowball and have it paid off even faster!
For more tips on paying off debt quickly check out:
I am so glad you are thinking about getting out of debt and taking the first steps to get there. When using a debt snowball calculator, don’t get discouraged about the total number but let it make you angry enough to say you want it gone as quickly as possible.
I have listed out several ways to get started on paying off your debt quickly but you have to take the steps to get there. I would love to hear from you and know the steps you are taking.
I sincerely enjoying helping people pay off their debt just like we did!
Follow me on Facebook and let me know!