Trying to pay off $98,814 in debt is daunting, but paying off $1,766 doesn’t sound so bad.Ī study from the Kellogg School of Business at Northwestern University found that consumers who used the snowball method paid off their debt faster. These small wins are built into the snowball method, which is why it is so effective. Studies show that small wins are the single most important factor in accomplishing a hard task. Then, you’d focus on your monthly auto loan payments and finally your student loans. Then, when that was paid off, you’d take the money you were using towards your medical bill and apply it to your credit card bill. Using the debt snowball method, you would pay off your medical bill first. Here’s an example of the debt snowball method in action:
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