This month, I will be starting a new game plan on getting one step closer to financial freedom. I am attempting to simplify and polarize one section of Dave Ramsey's financial plan into a real life scenario. I currently owe a little more than $20,000 in student loan debt and I owe around $150,000 on my house. My student loans are broke down into around 12 small loans. My game plan is to start paying $400 a month extra on the smallest section of my loan. This loan is currently a $31 a month minimum payment. In two months I will have this paid off. When I do get that paid off I will start paying $431 extra a month of my next smallest which is a minimum payment of $40 a month. When that loan is paid off I will start paying $471 extra a month of my third smallest. Get the gist? Haha. This is called the debt snowball effect. These little 30-40 additions seem small but listen to this. In just over two years of paying on my student loans, I will be paying $750 directly to principal on my house note! This is huge! This is even more effective if you have more disposable income to throw at your debt. For me I have made the decision to cut extra things I spend on out of my every day life. Stopped eating out and doing other things that are unneeded.
Getting out of debt is extremely liberating. It allows you to start project you only dreamed of having time for. Also living within your means is a skill that is much needed as well. Best of luck