Sandy's husband had an ATV accident a few years ago. They were both in between jobs at the time and had no insurance. They still have $20,000 in medical bills to pay, in addition to $8,000 in credit card debt. Dave tells them where to start in order to clean up the mess.Read Transcript
You can wander into debt, but you can't wander out.
With all those payments going out each month, there's nothing left for you. To get out of debt, you've got to change your habits. Create margin. Earn extra income. Live on rice and beans. You can be debt-free. We'll show you how.
1) List your debts in order from smallest "total payoff" balance to the largest.
Don't worry about the interest rate, unless two of the debts have a similar payoff balance. In that case, pay off the one with the highest interest rate first.
2) Attack debt by paying as much as you can on your smallest payoff balance. You need quick wins.
Only make minimum payments on all the other debts and put everything you can into the first debt. When you knock one out, cross it off. This will show you how close you are to becoming debt-free and keep you fired up!
3) Once you've paid something off, move that entire payment to the next item on the list.
As the payments roll over, watch how fast your payoffs grow. You can be out of debt sooner than you think.
Financial Peace University has helped more than 2.5 million families dump debt and change their futures. It's your turn! Sign up for a class near you.
Fundamentals of Getting Out of Debt
Hear From the Experts
Your car loan is killing your wealth – Dave rant
Adam is going through a divorce that's about to be finalized. He has been following Dave's plan and was working on his debt snowball. Adam asks if it's okay to pause work on the debt snowball while getting back on his feet financially. Dave and his daughter Rachel Cruze both say yes.Read Transcript
Brandon has $55,000 in debt, including $15,000 on a car loan. He has a part-time job and is working up to 70 hours some weeks. Brandon wants to know what Dave recommends for staying motivated through this process.Read Transcript
Tools to Help You Dump Debt
Financial Peace University
Take control of your money! The average family pays off $5,300 in debt and saves $2,700 in the
first 90 days!
The Total Money Makeover
Learn the seven easy-to-follow steps that lead you out of debt and into a new future!