It is easy to get into trouble with the convenience of credit cards. These pieces of plastic allow us to see something we would like and “get it now”. I feel we all fall prey to this concept, myself included – and that convenience led me to utter financial chaos in my life not just once, but three times.
As I sat down that final time to finally “get it” I realized managing your budget is not easy, what should I pay first. Oh, I looked at those with the highest interest as opposed to the lowest amount owed. I had knocked off several cards and destroyed them, but still even today I have about five or six left. Now I ask this – in managing your budget, can snowballing debt really work?
Well, let’s see I am going to go through the steps of snowballing my own debt I currently have – then I will break down those steps into separate articles to make it easy to follow along with your own situation. For this, I discovered clarity in my own personal finances came from realizing that everything we do has a beginning and end – hence, what I call the Alpha-Omega Approach to Budgeting.
The Alpha-Omega Approach
This approach demonstrates that we are always moving from point A to point B in everything we do – our money habits as well. Without a budget we have no way of knowing where we are financially until it seems too late. Hearing the words of my stepdad say, “I always saw you as someone who was more likely to succeed.” set a feeling of letdown and failure in my life. I hated that feeling, and I am the type that has to change things for the better. These are the steps I soon employed in my own situation:
1. Identify Your Present State
Okay, first make a list of ALL your credit cards and sources of debt, add the total balance owed on each, the date it is due each month, and the minimum, you need to pay to stay current. Then arrange the list in least to most owed order.
2. Set A Realistic Goal for Attainment
Can you see the progression of the Alpha-Omega Approach? Point A – you listed all your active accounts. Then you set a goal without knowing it to have an ordered list by amount owed – least to most which would turn out to be Point B. But, you cannot go from Point A to Point B in anything without having mini-steps in between to break down the end result.
3. Plan the Steps You Need to Take
As you can see you had to take each card or account and look up to find out what the total due was, due date, and minimum to keep you from going delinquent each month. Only then could you make a valid ordered list as the end result.
4. Celebrate!! Celebrate!! Celebrate!!
Great Job!! You achieved your first realistic goal in the actions to create a snowball to eliminate payments in the end. Do you remember going to school and coming home on the honor roll how your parents would get you something special for the achievement. Well, it is no different now that we are older – only we have to give ourselves permission to celebrate the occasions. Go grab a cup of coffee and relax a bit!
5. Start All Over Again…
This is basically what snowballing is and we can make it fun! The end result is ultimately to have NO DEBT, and the money we are using to try to pay it off instead goes into personal savings every month to grow and expand so we can use it wisely without reaching for a credit card to get something we think we need.
So, in managing your money – can snowballing debt really work? I say, most definitely!! But it is going to take some time, patience, and perseverance on your part.
Were you following along with your own debt here? Please share your comments now on what you experienced or let me know if you have any questions, I will be very happy to assist in snowballing your debt and growing bigger savings in the end.