What do snowballs have to do with payday loans? Well, if you have never built a snowman then how would you? A snowball starts small and will continue to grow it gets rolled around. Push it along the snow or let it roll down a hill, the snowball will get bigger leaving a crevice trail behind. Debt can build in the same manner. It can start small and continuously grow, sometimes faster than others.
Turn the snowball effect around and instead of growing; let the large debt start rolling on plain ground. You will see the snowball gradually melt away or at least be torn down one chunk at a time.
It all starts with looking at the big picture. Make a list of all your creditors and the debt owed to each one. Now arrange them in least to greatest order. Don't pay attention to interest rates especially if the debt with the highest interest is also your largest debt. When starting to pay off debt with the largest portion, it can be frustrating when there are no fast rewards. Paying off the lowest debt will bring a feeling of achievement and encouragement to keep going.
Once you have the order of debt set, make minimum payments on all balances except for the one which you are working on. Do whatever needs to be done to scrape together as much as possible and put it against the balance at the top of the list. Once you have paid off that first bill, take the money which you were paying on that one and add it to the second bill on the list. Notice it said add, not replace. If you were already spending $40 as a minimum payment, just add the amount to the $40. The increased payment will get your second bill paid off even faster. Keep repeating this process till you have whittled your debt away.
If you find two similar debt amounts as you work your way down your list, this is a good time to look at interest rates. Choose the one with the higher interest rate to be paid down first.
Paying off debt seems so simple when it is just words on paper, but if you look at is as 80% behavior and 20% knowledge, you can focus on your personal spending. You may feel you have no extra money to juggle in order to even start the process. Before you can start paying off your debt, you must start with a budget. This will give you a better look as to where your money is going. This will give you the chance to find extra, even if it is cutting back bits and pieces from different budget categories. You may be surprised as to how much money you can juggle around once you cut back overspending. The more momentum you can get in snowballing your payment amount the faster you will have this pile of debt taken care of. If you can, get a second job, sell stuff you have hanging around the house or garage, or use money you received as gifts. Payday loans are short-term loans are designed to be paid off fast with high interest hovering if left unpaid. High interest or low interest, it still increases the balance owed. The faster you can pay off your debt, the more money you will have to save or invest.
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