Are you tired of losing your hard-earned money to monthly interest payments? Imagine what you could do with an extra $100-300+ per month in your pocket! That day could be closer than you think.
The Snowball Method is a well-known tool for quickly climbing out of debt. It assumes only two things:
- You are presently making all of your minimum payments.
- You can dedicate a small but extra amount, called the "snowball," to put towards your debts each month.
Using the Snowball! App helps you analyze different payback plans by calculating when you will reach debt freedom and the total interest you will pay.
Screen #1: Enter Debts.
Use the + icon at top left to add a new debt, or the double-arrow icon to
rearrange the list and/or delete debts.
Minimum info needed: present balance, minimum payment, interest rate (APR). Optional: name of debt, monthly due date.
Monthly interest charges are calculated automatically.
Screen #2: Form Payment Plans.
Use the + icon at top left to form a new payplan, or the double-arrow icon to
rearrange the list and/or delete payplans.
The main task here is to try different snowball amounts and see their impacts on how long it takes to get out of debt and the total interest you will have paid. You may be impressed by what an extra $50 per month can do!
In addition, you may choose one of two payback strategies. Many recommend the "L" strategy, which means paying off lower balances first. This is mostly for a psychological boost, since it "gets the snowball rolling" faster.
The "H" strategy, on the other hand, will usually result in less interest paid and an earlier debt freedom day. Here, you discipline yourself to tackle the highest interest rates first.
Screen #3: Amortization Table.
Back on Screen #2, you may have noticed the big button on the bottom, labeled
"Payment Schedule." Once you've entered your debts and at least one payment plan,
you may select one of your payment plans to view its amortization table.
This shows you how much to put towards each debt each month, and lets you follow how all
of the balances and interest charges will drop over time.
And then you'll be out of debt! How fun is that?