What is the Snowball Method to Paying Down Debt?
In a report by Bloomberg, mortgages drove Canadian consumer dent to $1.7 Trillion. In fact, mortgage borrowing was up 41% in Q1 2021, compared to the year prior. When it comes to paying down debt, getting started can sometimes be the hardest part.
Just like when we first start working out, getting to the gym is the most difficult. But, once you’re there, it’s easy to be inspired by others and to pick up that weight or get on the treadmill.
The same goes for your personal finance fitness. Many of us don’t even know where to start when it comes to paying our debts off. Especially if we have debt from several sources.
If you are someone that needs to see immediate results in your efforts, then the best way to tackle debt for you could be the ‘Snowball Method.’ This method promotes the idea of paying down debt from your smallest loan to your largest.
Unlike the ‘Avalanche Method,’ described in another post, the snowball method gives us instant gratification. It isn’t the cheapest way to pay debt down, but it’s the easiest way to stay motivated.