Debt snowball.
Dave Ramsey’s debt snowball lesson is simple. Start with your smallest debt and attack. Once that debt is paid off, take that payment and apply it to your next smallest debt. It’s a snowball effect. One payment added to another. The unique aspect of this approach is that you aren’t getting rid of your highest interest payment. To most this goes against your core.
Dave developed this method because a person gains momentum. Get rid of one debt and the adrenaline starts flowing. The thought is that you get excited about tackling the next debt and you put everything into getting rid of another!
I thought it was a feasible way to attack debt. In fact, I got excited just listening to the lesson. Before the class, we had some small things to get rid of but thought we should focus on our car. Instead of making headway, we felt like we were swimming in circles. After watching the debt snowball lesson, we refocused our efforts and got rid of our small items. We had one big target {minus the house} to look at. Dave says to put all your money into getting rid of that debt and that’s what we’re doing. {Don’t forget, this is after you’ve done baby step one.) I am excited to say that our next goal is almost complete!
If I walk away from the Financial Peace class with nothing else, I will proudly announce that we have made some awesome financial decisions that have led to a much happier financial life. When starting the class, I was worried that a budget would mean we’d lose our life. I was afraid we’d become strapped for cash and feel like we couldn’t spend money. Instead, we’ve become more conscious of where our money is going and have concentrated on becoming debt free!
We did FPU three years ago. We have not been consistent over that time, but we have still made progress. I was the same way you were–thought a budget would mean no fun money, all stress, and so on. It has been so freeing to do a budget though! We have a blow envelope and I don’t have to hide what I’m spending or feel guilty about it. We’re far from perfect and we have a long way to go, but FPU has been key to getting on track. And the community aspect of the classes was great for us too. Good luck!