FOCUS On The Debt Snowball

by Ryan Yates

What does focus mean in terms of paying down debt?  Everything!! Focus helps to zero in on your goals by taking the bazillion tasks, ideas, and obligations of life and directing them toward the a specific goal you’d like to achieve.  Since destroying debt is the theme of DeliverAwayDebt we’ll look at how focus will help eliminate all your debt.

The Debt Snowball

Without focus your debt snowball would completely melt away.  To use a debt snowball you need to apply ALL Extra money toward one debt.  Once that single debt is paid off, the Extra money along with the original payment from the debt is applied to the subsequent debt.

Lets say you have a credit card with a balance of $2,000 and a payment of $100 per month, you also have $300 extra each month to “pay down debt”.  Using the debt snowball you’d pay $400 a month ($100 + $300 = $400) until the debt was paid off in 5 months ($2,000/$400 per month = 5 months).  At the end of the 5 months you’d then take the $400 and add it to the next minimum payment to get a larger debt reducing payment ($400 + next minimum payment = More Debt Destroying Power).  This cycle will continue until all the debts are gone.

Since most debts have an interest rate attached to them, using a focused approach will greatly reduce the time and money it takes to satisfy these debts.  The shotgun approach (a little extra money on each account) will pay off the debt too, although it will take many more years and thousands of extra dollars because of the effect compounding interest has on these accounts.

Financial Blinders

Just like a horse needs to wear blinders to block out distractions, you need blinders to focus on paying down debt.  So what the heck are financial blinders?  A budget and a debt snowball.

The budget is used to limit your spending and increase your Extra money.  A budget is already your tool to limit the amount of money you spend throughout the month.  It acts as a shield as you walk through Best BuyNordstrom’s, or if you need fast cash? Instant Cash Advances Online from can get you cash in your account now.  .  These shields preventing your eyes from wandering over to the sale racks, or the “Just released” section of the DVD area.

The debt snowball (a post with great examples) is used to utilize the Extra money you have in order to pay down debt.  Without a purpose for your money, it will be wasted on many useless items.  The debt snowball will help you limit spending even more.  Every dollar you spend on a non-budgeted item is one less dollar you can use to pay down debt.  The less money you have to pay down debt, the longer you will be in debt. It’s that simple!

Limited Resources

There is a limited amount of income that you have to play with.  That income needs to provide food, shelter, clothing, and transportation (the basics).  The money also needs to fund everything else in life; insurance, car/house maintenance, bills, vacations, etc.  The point is that you need to make the best choices with your limited resources.

Having focus will make this a simple task.  Since blasting away debt is our focus, then some of these limited resources need to be applied toward our debt.  Vacation? Nope, that money will go toward debt.  Premium movie channels?  No time, that money will be add to the Extra money column to increase the debt snowball.  New summer clothes?  Hell no, you still look good in last year’s shorts so dump the clothing fund and beef up the snowball.

Get Your Focus On

Pick an aspect of your life to focus on.  If you don’t have debt, focus on building a net worth of a million dollars.  If you are over weight, focus on eating right.  If you are in debt, focus on building your monthly debt snowball money and you’ll be debt free faster than you’ve ever thought possible.  Any other ideas on focus?  Any points I’ve missed?  Please let me know 🙂


Que June 3, 2010 at

I’m still at the saving the $1000 for the emergency fund. We made some very bad financial decisions over the last several years. And it’s amazing how you can’t see you are treading financial water when you don’t know what it looks like. Then you read something or listen to someone (in my case Dave Ramsey) and you look around and all you see is water. It’s like waking up from the matrix.

So now we see what we have to do and the start is getting an emergency fund. The problem with us was that we were making less than needed to pay all of the bills each month. So we were slowly going further down in debt (late fees and such). Finally, I made a change at work to an evening shift and now (with zero free time anymore) we don’t have to pay for childcare. So that now has us at the level to where we can pay things on-time. So we stopped the bleeding we just haven’t moved forward.

The good news about all of this is that yesterday my wife was offered a better job. And if it all pans out we will finally be in position to get the emergency fund and to start the snowball. If it doesn’t pan out then I will be following in the delivery model to financial freedom that you have mapped out.

Love you site. Keep it up!
.-= Que´s last blog ..The Little Financial Gremlins =-.

Jeffrey Kosola June 3, 2010 at

Que, don’t worry about the financial decisions of the past there is nothing you can do about them now. I know from experience 🙂 Financial clarity is a wonderful and scary thing all rolled into one. As Dave says, take care of the important things first; food, shelter, clothes, and transportation. Then worry about the rest. I would get the $1,000 Emergency fund in place before I worried about getting current with any bills. You’ll need the EF to bail you out in the future. With the EF in place you can start to stand on your own feet and begin to dig out. I’m glad your lady has an offer, and that you are making the sacrifice to change shifts. It will be worth it in the end, I promise. I still have $60,000 left to pay off and I’ve been able to see the light for quite awhile now. Just keep going, you are on the right track.

Forest June 3, 2010 at

One of the annoying things with my debt management plan is that I am legally bound to pay a certain amount to every debt each month so I am not allowed to snowball any debts…. it’s very frustrating!!
.-= Forest´s last blog ..Insanity Week 7 (Day 50) Fit Test Results…. Oh No!!! =-.

Jeffrey Kosola June 3, 2010 at

Sorry to hear that your Debt Management Plan sucks that bad Forest. I would go crazy if I couldn’t pay it off faster than the stated rate. You can still put a the Extra money into a “debt” account and use the money as an investment tool. Once the whole amount is allocated then you can let it sit there make you some money until the management company drafts it’s last payment. With the money set aside you can start doing all the other things you’ve had planned and you don’t have to wait for the debt management company to catch up to you. It’s like a debt management sinking fund.

Jeff @ sustainablelifeblog June 3, 2010 at

I think you’ve definitely hit the nail on the head here. Typically, the focus is where I tend to slip slightly when it comes to paying down my debt. While I stay focused most of the time, taking a short and quick vacation occasionally jumps into my mind, and because i’m still young, my parents frequently (and thankfully) shoulder lots of the cost of the vacations that I do elect to go on.
It’s not like I’m headed off for a $1000+ vacation when I’m in debt, but I do occasionally take short 1-2 night vacations that typically cost ~$50. It helps me keep my focus, but when I am on the trip, I definitely think about how I could be using the money in a better way.
I need to do a better job at keeping up my focus.
.-= Jeff @ sustainablelifeblog´s last blog ..Weekly Links – Summer Edition =-.

Jeffrey Kosola June 3, 2010 at

@Jeff If you like the mini vacations, you just need to budget for them. It’s ok to take a break once in a while, even I do every year or so (just kidding). You can still be focused and allow for time to regroup and refresh. I just booked a week long vacation for my family at the end of the month. I’ve been working 7 days a week for over a year now and need a little break. We budgeted for it so we don’t feel the least bit bad about it. As long as you always get back to the tasks at hard, a little R & R can be great.

JanB June 3, 2010 at

It is so hard fighting with my own head. I want to focus all on debt, but recently I have been wishy-washy and I hate that. I need to pay an amount on one more bill and empty out that “extra” money that is getting nickle and dimed away by things that we don’t need.

Need to do it right now. Thanks for the kick in the pants.
.-= JanB´s last blog ..A New Day =-.

Jeffrey Kosola June 3, 2010 at

Hi Jan, the best way I’ve found to get out of the wishy-washy phase is to figure out your “debt freedom” date. Mine is Sept 2011 but I continue to work hard to improve that date. The quicker you focus on your debt the quicker you’ll be out of debt. I use the Vertex42 debt reduction calculator to plot and scheme my debt snowball. Here’s the link if you’d like to check it out.

Jeffrey Kosola June 3, 2010 at

Hey Red, WOOT!! attack attack, I love it Young Lady 🙂 I ask myself the same question every single time I try to spend money. It is extremely hard for me to actually spend money, I never thought I would say that but it’s true. The budget and debt snowball blinders are in full effect over here in the D.A.D. household. Keep up the great work my Debt Destroying Friend!!

Mysti June 3, 2010 at

I totally know the snowball works logically. But emotionally, I have a hard time just paying the minimum. I always round things up. In the end, I might end up putting an extra $50 or so using the shot gun approach, even though most of the money is focused (we are FINALLY starting to see things go down….just a teeny bit). Then I kick myself when I realize I would have saved myself a weeks of debt if I took that $50 and put it into the debt I am currently snowballing!!

I am no where close to my debt freedom date. Other than I vowed it would be before my 40th birthday (but 38….or about 35 months…would be AWESOME…..not really realistic, but AWESOME!)
.-= Mysti´s last blog ..A Light Bulb Moment =-.

Jeffrey Kosola June 3, 2010 at

@Mysti I know how emotions can effect your debt snowball. I worked my pizza job for 11 months before I realized the extra money was just supporting my current lifestyle. It sounds like you and you man have to kick it high gear (get outside help, ie financial coach) or get on the same page and kick the crap out of the debt. The shot gun approach will not work for you. Get the budget on paper and begin the sacrificing. I know you guys are working to bring in extra income, but you need to take another look at how you are addressing your debt. Guessing at your debt freedom date isn’t going to cut it either. Use the link I included in the comment to JanB and plug your numbers in. If you do not like the date, you need to figure out a way to improve it. If you are stuck, I sent you a number a few months ago – use it 🙂

James June 3, 2010 at

above and beyond focus i think you need personal daily reminders and positive reinforcement.

one thing they say you should not do when you have a goal is tell anyone about it…you might ask why but the reason is simple most people will tell you that you can’t achieve your goal or it can’t be done. Don’t listen to them GO for it and don’t look back.

Jeffrey Kosola June 3, 2010 at

@James, I happen to think the opposite about goals. I’m currently sharing mine with the world. I find that it motivates me to achieve them. I’m not a person who likes to be wrong, so I will continue to bust it to reach the goals. I agree that most people will not believe you can achieve your goals, but usually they are lazy people who can’t achieve their own goals anyway. Not many people believe I can pay down 101K in two years, but I will and that’s my focus. Not to just prove people wrong, but to prove that once you know what to do, anything can be achieved.

Ok James, share one goal with us and I promise to support you until you reach it 🙂

Financial Samurai June 4, 2010 at

Jeff, what would you do? My smallest revolving debt is a school loan I took out a while ago. But, the rate is only 2.65%! It’s literally free money given I get 4% return on my CD. Wouldn’t it be best to pay off my mortgage and keep my student loan instead?
.-= Financial Samurai´s last blog ..Only The Poor or Super Rich Say, “Money Can’t Buy Happiness” =-.

Bern June 8, 2010 at

While Dave Ramsey may have a great concept with the debt snowball, I disagree with how you order the debts to pay off.

He says order them with the smallest payoff or balance first. I say to use the DOLP method created by David Bach.

This is the most efficient way to pay off your debt. It orders your debts in a way to make your money work hardest for you. People will find out that their house should be the last thing they try to pay off…
.-= Bern´s last blog ..Save Money by Using Ebay =-.

G@LVNV Funding July 27, 2010 at

I think Ramsey’s method of going with the easiest one first is so that people trying to get debt free will not lose heart, but will stick with it. Motivation is very important!

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