Dave Ramsey’s Baby Step 2 – How to Get Out of Debt Using a Debt Snowball

Dave Ramsey’s Baby Step 2 – How to Get Out of Debt Using a Debt Snowball. Dave Ramsey

Dave Ramsey’s Baby Step 2 – How to Get Out of Debt Using a Debt Snowball video duration 6 Minute(s) 23 Second(s), published by Hank Coleman on 06 08 2018 - 11:00:08.

The second baby step in Dave Ramsey's The Total Money Makeover is to pay off all of your debts except your mortgage
He recommends doing this by using a

Dave Ramsey takes a poke at Veterans Benefits on his show, and we're not happy about it! Andrew Paul joins us in studio to address the issues
Andrew is the .

The second baby step in Dave Ramsey’s The Total Money Makeover is to pay off all of your debts except your mortgage. He recommends doing this by using a debt snowball.

When Dave Ramsey talks about paying off all of your debts except your home, he means exactly that, all of your debts. This is where you list all of your debts in order from the smallest balance to the largest balance.

You should include all of your credit card debt, student loans, car loans, loans to parents, debt to the IRS, money borrowed from your parents or family, late payments that you still owe hospitals, and all of your other debts.

What is a debt snowball? A debt snowball is a well-known method that is used to eliminate all of your debt. This method was made popular by Dave Ramsey in his personal finance book, The Total Money Makeover.

The method requires you to deal with the smallest amount of debt first and then move on to the next smallest and so on and so forth until all of your debts are completely paid off. Dave Ramsey instructs his followers to get rid of all of your debt except your mortgage which you will tackle in Baby Step Six.

Grab a piece of paper and list all of your debts owed. Make sure you list them by the balance that you owe from smallest to largest. Now, you throw all of your disposable income into paying off the debt at the top of your list, the smallest debt, first.

Determine how much money you can put towards this smallest debt and keep putting money towards this debt until you have paid it off, no matter how long this takes. For all of your other debts, you continue to pay the minimum payments that are due on them. Do not become late on any of your debts if you can help it.

Once you have paid off your first debt, then you add the amount of money that you were paying on that debt and tackle the next one on your list. When you take that amount and the minimum you were already paying on that debt, you will see more money become available to put towards paying off your debt.

That is why it is called a debt snowball. It keeps rolling downhill and keeps getting bigger as you pay off more debt. You add your extra payments to the next debt where you are already paying the minimum balance. It has a compounding effect that is very powerful. Now, you just repeat this process until you have paid off all of your debts on the list.

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Dave Ramsey Baby Steps

Baby Step 1 – $1,000 Emergency Fund
Baby Step 2 – Pay Off All Of Your Debt With A Debt Snowball
Baby Step 3 – Fully Fund Your Emergency Fund
Baby Step 4 – Save 15% Of Your Income For Retirement
Baby Step 5 – Save For Your Children’s College Education
Baby Step 6 – Pay Off Your Mortgage Early
Baby Step 7 – Build Wealth And Give

Total Money Makeover book ~ https://amzn.to/2uIrvEG

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