1| You have debt
2| You want to reduce/eliminate your debt
3| You have a Zero Balance Budget
4| You have an Accountability Partner
5| You understand Snowballing Debt Payments
1| Easy to set up this strategy.
2| Mathematically, it’s a very efficient way to pay down your debt, since you will pay off the debts with the highest interest rate first.
1| If your loans with the highest rates are also your larger loans, it will take you longer to reduce the number of outstanding loans.
1| Organize your debt (loans), in order of the one charging the highest rate to the one charging the lowest rate.
2| Focus your excess debt allowance and/or unused cash flow to the first loan on your list.
3| When you pay off a Loan, snowball that payment onto the next loan on your list.
4| Repeat steps 2 & 3 until you are out of debt.