The second Baby Step involves paying off debt
using the debt snowball method. This approach prioritizes paying off debts from smallest to largest, regardless of interest rates. The idea is that by tackling smaller debts first, you'll gain momentum and motivation to continue paying off debt as you see your progress.
To begin the debt snowball method
, list all of your debts (excluding your mortgage) from smallest to largest. Make minimum payments on all debts, but focus any extra money you have on paying off the smallest debt. Once you've paid off the smallest debt, roll that payment amount into the next smallest debt, and continue this process until all debts are paid off.
The debt snowball method
is an effective way to stay motivated and focused on your debt payoff journey, as it provides quick wins that keep you engaged and encouraged.