For those unfamiliar with the term, a debt snowball is Dave Ramsey’s method of becoming debt-free. You pay off your debts starting from the smallest balance to the largest. Begin by making minimum payments (plus any additional money you can throw in) on the smallest balance. Once that debt is gone, use that money (plus the minimum you were already paying) towards the next one, and so on, and so on. Hence the term “snowball”.
Making the decision to pay off debt is easy. It’s the days, months, and years that follow that are difficult. This a life choice that requires commitment, determination, and sometimes some outside motivation. Tim and I started the journey a little over four years ago and we are finally seeing the light at the end of the tunnel. We’ve had setbacks along the way and definitely weren’t as hardcore focused as some folks (we knew that cutting out all vacations or living off ramen noodles just wasn’t for us). God willing, we will have all of our debt (minus the mortgage) paid off this July. It’s a blessing and I cannot wait to be there! However, I’ve realized that there’s one slight problem attached to this phase of the process….. the “we’re basically there” mentality.
This finish-line being in sight has thrown in a slight loss of focus. I’ve been living on such a tight budget for so long that I find myself beyond ready to fluff my wardrobe, refresh the home decor, and not nickel and dime every grocery store trip. I’ve had to really reel myself in and remember that “almost there” isn’t “there”.
Whether you’re like us and almost to the end of this process (hallelujah!), or just getting started (congrats on this life-changing decision!), staying motivated is key. Here are some ideas to keep yourself going through the times when you feel like giving up.
Keep a Chart. Seeing your progress is incredibly rewarding. I’ve seen some really cute bar charts out there where you fill in the bar each month to the total amount paid. People often keep these on their refrigerator or on their home office walls. Somewhere that offers you that constant reminder that you are making progress…..no matter how slow it can seem at times. Personally, I just keep a document that I update at the end of each month. It shows how much we’ve paid that month in each category and what our total amount is to go. It sounds so nerdy, but updating that form each month is so much fun! Plus, I can go back and see the ones from 2015, see how far we’ve come, and really breathe a sigh of relief.
Let Your Close Family and Friends Know What You’re Doing. Money can be a taboo subject, especially in the south. However, if you have good people in your life they can be a great source of motivation. Obviously, they won’t be around to talk you out of those late night shopping binges on Amazon, but they will be happy to come over to hang out and cook dinner at home versus going out for an expensive evening. Find out who these cheerleaders are, and let them in on your mission. You may even find them jumping on board to change their life and future as well!
Reward Yourself Along the Way. Whether it’s your $85 Loft charge or your $10,000 car lease, each debt that you pay off is a huge thing to celebrate. For me, just seeing that total balance go down and rolling the payment onto the next target was hugely satisfying. But if small rewards help keep you motivated, then do it! Go out for a nice date night with your spouse or buy yourself that little something that you’ve had your eye on. Just make sure the reward doesn’t set you back on your big goal.
Plan a Big Reward For When You’re Debt Free. Since we chose not to do small rewards along the way, we’re going all out once that last debt payment goes through. Tim and I have our five year wedding anniversary this fall, so to celebrate this in-conjunction with starting our new debt-free lives, we plan to spend a week at the all inclusive resort in Mexico where we went on our honeymoon. If there every was a motivator for me to stay on track just a bit longer, the promise of a beach and unlimited drinks fits the bill!
Read Dave Ramsey’s Blog. I can thank Dave Ramsey’s system for being our inspiration to live this life. I would recommend his program to anyone (and I’m not endorsed to do so). He also has a blog that updates several times each week and will include tips, helpful references, and motivational personal accounts from those who are now debt-free. I go here when I’m feeling overwhelmed by the whole process. The stories from those who have accomplished the goal were especially inspiring. It reminds me that I can get there and how great it will be once I arrive.
Think of Your Future (and Your Kids’). How do you picture your life ten, twenty years from now? Are you still living paycheck to paycheck relying on credit cards when anything “unexpected” (car repairs, vacations, Christmas) comes up? Or, are you finally living without the stress of finances bearing down on you? What about your children? Are they starting their adult lives with student loans, car payments, and credit card debt? There are so many things in our lives that we have no control over. Our finances are not one of them. You can control your money. You don’t have to live the backwards “American way” relying on borrowed money for every purchase. Coming to this realization is extremely empowering and it became even more important once we had a baby. I knew that financial independence was in our future, for our sake and for hers.
Well, there you have it. Are you motivated?? I sure hope so. Remember that this is something that anyone can do! We are not wealthy and live off of one salary. If we can make it this far, so can you!
I would love to hear your motivational tips for breaking out of the debt chains.
Baby Step 1: See how we saved for our emergency fund before starting the debt snowball.