Comments on: Debt Snowball Plan For Recession

By: Lee

Lee — Mon, 21 Sep 2009 00:44:43 +0000

A great idea in the current economic climate. It’s too late for me to do this from the beginning, but I am now doing it for my last debt: My bank loan.

Because it is front-loaded, I can’t overpay it so I’m saving the lump sum to do so in my savings account. When I get to loan balance £1,000, I’m paying the sucker off!

By: * Dave Ramsey’s Debt Snowball

* Dave Ramsey’s Debt Snowball — Tue, 05 May 2009 20:56:54 +0000

[...] to Start and Manage a Debt Snowball at Mrs. MicahDebt Snowball Method at Christian Personal FinanceRecession-Proof Your Debt Snowball at Frugal DadEliminate Debt with the Snowball at Zen HabitsFinance Tool : Debt Snowball Calculator [...]

By: how to: pay off your debt — the ¢entsible life

how to: pay off your debt — the ¢entsible life — Mon, 30 Mar 2009 14:21:14 +0000

[...] is a very solid method from FrugalDad. I think it is especially good advice for families, particularly single income families. [...]

By: Simplify Your Personal Finance Life | Frugal Dad

Simplify Your Personal Finance Life | Frugal Dad — Mon, 09 Mar 2009 11:03:14 +0000

[...] debt to as few accounts as possible. When we first began our debt snowball plan we had several debt accounts – credit cards, student loans, a car loan, and an old consolidation [...]

By: Amy K.

Amy K. — Sat, 07 Mar 2009 03:05:30 +0000

I used a similar approach when I was paying off my car loan, but instead broke it into chunks of $500 to $1,000. I appreciated the security of the extra cash in my account, and sent it to the bank to apply toward principal when I knew I had breathing room.

Chunking it up a bit might ease the mental stress – rather than going from $5k to $1k in the emergency fund when you’re ready to pay off this loan, instead plunk an extra $500 into the loan and leave your emergency fund with 3xrent at all times.

By: Jackie

Jackie — Thu, 05 Mar 2009 14:58:59 +0000

My husband and I didn’t think that $1000 as an efund was adequate, so we did the same thing as you in order to pay off our last credit card. It worked really well for us since we knew we had the money in savings if either one of us lost our job. Our card has a 0% interest rate, so it was really a win-win situation. It’s a personal choice on how to best save money and it really comes down to what makes you feel most secure.

By: andre@fairly-biased.blogspot.com

andre@fairly-biased.blogspot.com — Thu, 05 Mar 2009 02:47:29 +0000

I like the idea of keeping your money liquid in case of unemployment during the recession, especially if you’re in a field that is susceptible to layoffs. However, this idea doesn’t let you see your debts decrease every month – which is the main motivator of the debt snowball. That’s only my opinion though, otherwise, a sensible idea during financial crisis.

By: Nate @ Money Young

Nate @ Money Young — Wed, 04 Mar 2009 20:36:46 +0000

I think this would fit in the Financially Smart vs. best decision. I don’t think saving money is financially smart, but if it works for you, bravo!

-Nate

By: Anne

Anne — Wed, 04 Mar 2009 15:37:46 +0000

I’m so glad to see this put forth as a valid snowball technique! My only debt is student loans and those are fixed at very low interest rates. Since my EF is only at 3 months (which I feel is not adequate for a single gal with a single income) I throw everything extra into that account with the knowledge that I could make large loan payments if I wanted to. Although currently I’m hoping to have an extra 3-5k by next January-ish to start an IRA.

By: financePHI

financePHI — Tue, 03 Mar 2009 00:38:24 +0000

I spend like I’m still in college, which works out great. I think these days that people need more than $1k in an emergency fund, especially if they are over-leveraged on their assets and may need the cash to cover payments month to month.