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Getting out of debt is one thing that many people face each and every day. If you feel like you are buried in debt up to your ears, you’re not alone. According to a recent study by NerdWallet, in 2016 the average household credit card debt came to $16,748. To add more to the mix, the average household total debt is just shy of $135,000. (You can see the original blog post reporting this info at https://www.nerdwallet.com/blog/average-credit-card-debt-household)

With these numbers rising, it is no wonder why many feel there is no way out. I am here to tell you that if you are determined and you have a plan, you can accomplish debt-freedom and defeat normal. My wife and I are currently working to tackle our debt and have found that the debt snowball method works the best. Why? Because it is all about motivation.

Here’s how it works. Gather up all those statements for each creditor you owe and write down each creditor and the current balance. (Yikes! It can sometimes be scary to see all those numbers in one place, but I can assure you, this will help) Now that you have those balances, put them in order from smallest to largest. Next to each balance, write down the minimum monthly payment. You will then have something that looks like this (I just made up these numbers):

Credit card 1       $500                       $20

Credit card 2       $1,000                   $35

Credit card 3       $2,000                   $70

Car                        $10,000                $200

Mortgage            $100,000              $1,000

With these numbers, you have a total minimum payment of $1,325. Now that you have all of your balances in front of you, look at your budget and decide how much extra you can afford to throw at your debt each month. Let’s say it’s an extra $200. Add this extra to your smallest balance. So instead of paying $20 on credit card 1, pay $220. In just 2 months, this card will be down to $60.

Now, on month 3, you can wipe out that first card and still have $160 left over. Apply this $160 to credit card 2. Month 4, you will be down to 2 credit cards, the car and the mortgage. Now, take the $20 minimum you would have paid for credit card 1, the $35 minimum you have for credit card 2 and the $200 extra to make a total $255 payment to credit card 2. In just a few short months, this one will be paid off as well. Continue with this same method for credit card 3, the car and finally the mortgage.

It is a very easy system to follow. I know you may be thinking “this is going to take me forever”. One of the great advantages of using the debt snowball method is that it feels so good to cross an item off the list once it is paid off! After the first and perhaps even the second items are done, you may realize that you can afford to put a little more toward your debt. Even if it is just an extra $20 or $30 a month, it helps. Before you know it, you will be adding this extra and knocking out these debts one by one. The feeling of paying off a balance has huge momentum. Once you get to the mortgage, in this example, you will be paying at least $1,325 each month. With that extra $325 a month toward the mortgage principle, you will see that principle balance come down faster that every before. What a great sense of power!

And just imagine. What if you could be debt free, including your house?! Not only would you have defeated normal, but you have totally obliterated it!

I am always open to your questions, thoughts and status on your financial journey. Please leave comments below or you can reach me at defeatingnormal@gmail.com.

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