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A Wealthy Wonderland: Snowballing to a profit!

Published on Thursday, November 10, 2011 in , ,

Flurries have a lot to do with finance if you collect them the right way so instead of spending all your savings on merchandise this season, try putting some of it towards unwanted debt. There are three popular ways to rid your life of debt, and those three methods deal with snowflakes, snow balls, and avalanches.

When you think of your finances as snowflakes or flurries, you basically evaluate all of your bills and substantial debts that you owe, and you come up with ways to earn extra income. All of the extra income is thought of as snowflakes that are sprinkled onto any debts you may owe. A seasonal job or extra money received from taking online surveys or a side hustle of some kind are considered snowflakes that help reduce debt substantially over time.

Snow balls and avalanches, however, are more methodical in nature. The snowball method requires that you pay MORE THAN THE MINIMUM PAYMENT on the SMALLEST bill you owe (i.e. a monthly credit card bill). A dollar more than the minimum even helps, but the idea is to pay as much towards your smallest bill as you can. Then once that bill is paid off, you can use your extra funds to attack your next smallest bill. The more money you pay off, the more money you have available to pay of each bill hence the snowball effect, and eventually you will be DEBT FREE if you stick to the plan.

The Avalanche method is more drastic than the last, though. You would actually attack your debt with the highest interest rate. Doing this would save more money in the long run, because you're not wasting your money on so many finance charges and fees charged by your creditors. Once you pay off the highest interest rate, you would move down to the next highest interest rate until all your debt melts away, and when no existing debt is left…

I think we all would agree that this would truly be a WEALTHY WINTERLAND!

So start saving and make your debt disappear!

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