For more information, see Dave Ramsey's article on the debt snowball effect, or read his book, "The Total Money Makeover". ![]() Unless you choose the "No Snowball" option, ALL of these strategies make use of the snowball effect described above. Each of these strategies has to do with the order that you target your debts with your snowball. This section describes the different strategies that you can choose within the debt snowball spreadsheet. 42 Effective Ways to Save Money Debt Reduction Strategies.How to Calculate the Monthly Payment to Reach Your Payoff Goal.What Debt Reduction Strategies Do You Use?.In that case, the spreadsheet automatically divides your snowball between the current and next target. There are times when your snowball is larger than the remaining balance on your current debt target. Your new larger snowball becomes the extra payment that you apply to the next debt in the sequence. ![]() So, that payment amount gets rolled into your snowball. The snowball is the extra payment that you will make on your current debt target.Īfter you pay off your first debt, you no longer need to make the minimum payment on that debt. The total monthly debt payment remains the same from month to month. When applied to debt reduction, the snowball effect refers to how your extra payment grows as you pay off each debt.Īs defined above, the snowball is the difference between your total minimum payments and your total monthly debt payment. The snowball effect is the idea that a snowball grows as it rolls down a hill. Experiment with choosing different payoff strategies or use the Custom column to choose the order to target your debts.
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