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our debt. For some, it will only be a matter of weeks or months to complete the process. For the rest of us, months and years may be required. The sooner we start, the easier and quicker we will be able to finish and enjoy the choices that freedom from debt will bring.

CHOICES

Once we know how much debt we have, how much money we can use to eliminate it and how much change we can accept to reach this goal, we are ready to decide how we are going to get out of debt. There are three main choices to follow: the Debt Snowball, Snowflaking and the Windfall.

In the debt snowball, all money at the end of the month that has not been spent is applied to the outstanding debt. The minimum payments are made to all debt. Then, depending on whose advice you take, the remaining balance is applied to the smallest debt or the debt with the highest interest rate. When a debt is paid off, the money that was being paid to it is now applied every month to the next debt in line.

Snowflaking can be done with the Debt Snowball. In a snowflake, any extra money saved or found is immediately paid towards debt. Didn't buy lunch today? That $6 gets sent in as a principal payment on a debt today. Found a winning scratch ticket? That $100 is a principal payment. This is usually done with an on-line bill pay service or via on-line payments directly to the debt provider.

The Windfall method is a bit different. Instead of paying off the debt in pieces, the minimum payments are all made. The extra money is put in savings until it equals the debt to be eliminated. Then the debt is paid off all at once. This evens out cases where income is irregular or there is a need to maintain more money in an emergency fund. It also works out well when a settlement, inheritance, or other significant sum is going to be arriving soon.

SUMMARY

With a commitment to not spending and changes to reduce the cost of living, it is possible to create a plan for debt elimination. By looking at our income, expenses and debt we can build a plan for debt reduction. Then, by using the Debt Snowball, Snowflake and Windfall methods, we can eliminate debt from our lives. This will give us security and comfort in trying times and open up new possibilities for us in the besst of times.

Learn more about this author, Jack Thornton.
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