As this it is a new year and much people think to leave the debts, fodder that is the moment for refreshing what the Effect means Snow Ball ; I said as it in my other article, the effect Snow Ball was popularized by Dave Ramsey and others gurs of the personal finances like a way to handle our payments of debt and to leave them more express. I am going to review with you an example step-to-step. It brings all Debts Before you can optimize your payments, you must know whatever you must, to that you must and what interest rate to him. You do not need much equipment, only collects this information for each debt 1. Amount that still you must 2.
Minimum payment 3. Interest rate Example: 1. Amount that still you must = $ 700 2. Minimum payment = $20/mes 3. Interest rate = 8,5% If you have several debts, is the moment that you enumerate all. Putting your debts in sequence How you would have to order your debts? Here it is when all the gurus are put to fight: Dave Ramsey is in favor of putting the debt that you must less than first. He thinks that this will generate an early satisfaction and the people will continue applying the system.
Because you paid to your debt smaller express, you will want to continue with the others. Other people advise to go away by the paid interests. Those that have major interest first, those of smaller interest later. I have placed in the alternative different spreadsheet, as it shows the figure to it? The lowest balance first? The highest interest first? The order that You entered the Table? NonSnowball? The highest Custom or the lowest Custom Ver the explanations of each in the spreadsheet For our example, we will use the advice of Dave Ramsey, the balance but under first.