Did you know that only 20% of Americans are free from debt?
It is true, Americans live in a self-fulfilling, I need-it-now society where debt is racked up quicker than you can say, ‘debit or credit?’
Getting caught in a never-ending debt cyclone is not uncommon and not something that is easily omitted from one’s life. True, the majority of debt in this country (44%) is mortgage debt, which isn’t always a negative. But an alarmingly high amount (39%) are from the use of credit cards.
Popularized by author Dave Ramsey, the ‘Debt Snowball‘ method is one that has helped many people break through from the shackles of debt. In the debt snowball, one takes all of their debts and lists them from smallest to largest. Start off by making minimum payments on all of them. Then, simply take the smallest and put all of your efforts into attacking that one until it is blown into smithereens. After that, you take your total focus and turn it to the next lowest. Proceed until you have wiped your entire debt slate clean.
This is one method that has proven to be very beneficial to many. There are many other ways to try and become relieved from the burden of unnecessary debt tying you down. Selling your house may be one way to free up extra cash and start digging yourself out of that debt cyclone.
An example straight from the Dave Ramsey website:
Say you have the following four debts:
- $500 medical bill ($50 payment)
- $2,500 credit card debt ($63 payment)
- $7,000 car loan ($135 payment)
- $10,000 student loan ($96 payment)
Using the debt snowball method, you would make the minimum payments on everything except the medical bill. For this example, let’s say you have an extra $500 each month from taking a side job and cutting your expenses down to the bare minimum. You are gazelle intense. Since you’re paying $550 a month on the medical bill (the $50 payment plus the extra $500), that debt will be done in one month. You would then take that $550 and attack the credit card debt.
You can pay $613 on the plastic (the freed-up $550 plus the $63 minimum payment). In about four months, you’ll wave goodbye to the credit card. You’ve paid it off! Now punch that car loan in the face to the tune of $748 a month. In 10 months, it’ll drive off into the sunset.
Now you’re on fire!
By the time you reach the student loan—which is your biggest debt—you can put $844 a month toward it. That means it will only last about 12 months. After that, Sallie Mae better get used to living somewhere else, because you’ve kicked her out!
Thanks to your hard work and sacrifice, you have paid off $20,000 of debt in only 27 months using the debt snowball method! Congratulations!
Anyone wondering, how do I use the ‘Chicago Debt Snowball” method to free myself from debt, we can help. We also work in the suburbs. If you want to sell your house fast, some of our favorite cities to work in are Joliet, Aurora, Naperville, Orland Park, Oak Forest, Tinley Park, Plainfield, Romeoville, Oak Lawn, Bolingbrook and Cicero.
Focusing mostly in the south and west suburbs, we buy houses quick for cash also in Elgin, Cicero, Oak Park, Downers Grove, Elmhurst, Lombard, Streamwood, Park Ridge, Calumet City, Addison, Glendale Heights, Chicago Heights, Burbank, Lansing, Harvey, Elmwood Park, Lockport, Westmont, New Lenox, Homer Glen, Maywood, Blue Island, Dolton, South Holland, Park Forest, Crest Hill, Homewood, Alsip, Matteson, Brookfield, Mokena, Hinsdale, Westchester, Country Club Hills, Bridgeview, Midlothian, Hickory Hills, Hazelcrest, Richton Park, Crestwood, Arlington Heights, Schaumburg, Palatine, Des Plaines and Wheaton.