March 21st is known as National Credit Card Reduction Day. If you didn't know that, don't feel bad, neither did I until like a week ago. That's neither here nor there, though. What's important is that today is the perfect day to drop a few gems that could help you with getting out of credit card debt.

Even if you don't have any credit card debt, you should make a note of this strategy because you're liable to have debt at some point in your life. That's about as certain as White people calling a predominantly Black neighborhood "sketchy."

According to NerdWallet, Americans carry over $420 billion in credit card debt from month to month, and there are no signs of that number lowering anytime soon. If you find yourself piling up debt like Thanksgiving plates, you may want to look into the debt snowball strategy.

Steps to Take

The debt snowball strategy focuses on paying off your debt in order from the smallest to largest, regardless of the interest rates. Let's assume you have three different debts:

  • Debt A ($1,000)

  • Debt B ($2,500)

  • Debt C ($5,000)

Here are the steps:

Step 1: List debts in order from smallest to largest

  • Debt A

  • Debt B

  • Debt C

Step 2: Decide your monthly debt repayment budget

Write down an amount you can reasonably pay back each month. Don't get evicted or go on a toast and bottled water diet trying to get out of debt. It's rarely (and I do mean rarely) that serious, fam. It is serious enough to prioritize it over your entertainment expenses though.

I'm not pocket-watching or anything like that, but if your monthly entertainment budget is double your debt repayment budget, that's questionable. That debt is costing you money, no need to let it linger around. That's hustlin' backwards.

Step 3: Write down the minimum payment for each debt

For each debt that's not the lowest debt, you will only pay the bare minimum you're required to pay monthly. In this case, you would make the minimum payments on Debt B and Debt C. If your debt payment budget is $300 and the minimum payments are $25, you would pay $250 on Debt A, and $25 each on Debt B and Debt C.

Step 4: Once the lowest debt is paid off, add that monthly payment to the next smallest debt

In this example, once you pay off Debt A, you would take the $250 you were paying on it and add it to Debt B, bringing those monthly payments to $275 ($250 plus the $25 minimum payment). You'll continue to pay the minimum on Debt C.

Step 5: Repeat.

Once Debt B is paid off, start paying the full $300 towards Debt C.

The Final Word

More than anything, the debt snowball strategy is mental. It helps form good habits, and seeing debts fall off one by one helps keep people focused on the end goal without getting discouraged.


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Stefon Walters
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