Get your debt snowball rolling at WhatsTheCost.com
Debt is a huge deal today. Lots of us are paying for the freewheeling we did – and not just in the .com era. Getting out of debt is a major priority for many Americans, myself included.
One method for getting out from under a mountain of debt is called “snowballing”, which is advocated by Dave Ramsey among others. The premise is fairly simple: even large debts can be trimmed down by getting rid of the smallest one first, then by adding that payment to the next one until it’s gone, and so on until you’re throwing everything you’ve got at that one debt that seemed insurmountable.
One difficulty has been seeing exactly what impact your debt reduction plan will make, how long it will take to get out, and so on. That’s where What’s The Cost? comes in. By adding your debts’ current interest rates, payments, and balances to its plan you can see where an extra kick in the financial pants can help.
Say I have two debts: a credit card (Crapital One) with a balance of $8500, an interest rate 0f 12% and a monthly payment of $100, and a line of credit (Walkalloverya) with a $15,000 balance, 4.5% rate and $125 monthly payment. I have budgeted $1000 a month to spend down my debt. I feed that into the calculator and check that I want to pay off my debts in order of highest interest first. To my surprise I find that I can be debt free in 25 months!
It also tells me that I’ll pay about $1300 in interest over that time. If I want to see if it will work better another way, just adjust the amount you’re paying or which to pay off first and compare plans. The site even gives you the opportunity to save snowballs if you register.
By the way, if I only paid the minimum balance on each it would take me 170 months – that’s just over 14 years – and I’ll pay nearly $15,000 in interest. Gulp.
The site has lots of other useful information to on debt management as well as a ton of other calculators. I highly recommend this site to anyone looking to kiss their debt good-bye!