6 Steps to Paying Off Debt Without Spending Any Extra Money

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Using the snowball method of paying off debt can get you out of debt a lot faster without spending more money each month than you already are. Just follow these step by step instructions to begin implementing this strategy today.

STEP BY STEP INSTRUCATIONS FOR PAYING OFF DEBT

1. Stop accumulating new debt. In order to get out of debt, it's important that you stop accumulating any new debts. Use a budget to make sure you aren't spending more than you're earning. If you're having trouble getting your expenses to be less than your income, look for some frugal living tips to help you save money.

2. Organize your debts from smallest to largest. Use a piece of paper or a spreadsheet to list all of your debts from left to right. Under each debt, list the current amount owing and the payment you are currently making on the debt each month.

3. Keep making your current payments until your first debt is paid off. There are no new actions to take until your first debt is paid off.

4. Once you get one debt paid off. You're ready to begin paying off debt in an accelerated manner. Take the amount that you were paying on the loan you just paid off and apply it to your next smallest debt. So if you were paying $100 a month on the debt you just paid off, and the next debt on your list has a payment of $150, your new monthly payment will be $250.

5. Repeat. Keep making this new payment on the second debt in your list until it is paid off. Once you've managed to wipe the second debt out. Take what you were paying on that debt and apply it to the third debt on your list. As each debt is paid off, the amount you can apply to the next one in your list keeps getting bigger and bigger. Keep repeating this process until all of your debts are paid off.

6. Celebrate your successes. Unless you're really motivated to keep paying off debt, take time to celebrate your successes. Each time you're able to wipe one of your debts out, reward yourself the following month by spending the same amount of money that used to go towards paying off that debt you just paid off. Buy something you've been wanting, or go out and have some fun. You deserve it for being so disciplined and for doing such a great job. Get back to accelerating next month and begin looking forward to rewarding yourself again. Each reward will get progressively bigger as you go along.

FOR MORE INFORMATION

Give our free debt reduction calculator a try to see how much time and interest you can save using this method.

For more information about debt, please check out our morepopular articles listed in the box below, or you can see our complete list of articles about debt.

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