I'm Swimming in Debt. What Should I Do?
If you’re swimming in debt, you need to tackle the true, underlying problem – your budget. If you don’t have one already, you’ll need to create one first, and then you need to go through your budget and free up some serious monthly cash flow that you can apply towards your debt payments.
Once you’ve freed up some cash, the next step is your debt snowball. This means you’ll categorize your debts by size and start paying off the smallest ones first. Pay the minimum payment on all other debts, but on the smallest one apply all of that extra cash to knock out that debt as quickly as possible. Once you have that one paid off, you apply it to the next smallest debt, and then the next. This will start snowballing those debt payments so that increasing amounts can be paid off on the larger and larger debts.
Before you know it, you’ll have them all paid off and will have your debt conquered once and for all!
Steve Marbert is a CFP® and the President of Richard Young Associates, and is a Dave Ramsey SmartVestor Pro. Want to learn more about him and our other advisors? Find out more here.