$38,000 is the average amount of debt (excluding mortgages) an American has, according to a 2018 CNBC.com article. Debt can be so stressful and even cause you to delay your weight loss surgery. You may feel guilty about spending so much money on your surgery when your debt is piling up. It may cause you to stress eat, which is something we want to avoid. These reasons are why you need to take control of your debt now, so it won’t sabotage you later.
There are two popular debt reduction strategies to help you: the snowball method and the avalanche method. By comparing the two strategies, it’s obvious which one has the advantage. I’ll even share my own experience with debt reduction and give you a few tips I used to make some progress. Snowball debt to help eliminate
Debt & The Snowball Method
When it comes to financial mentors, there’s two people I turn to. The first is always Rosemarie Groner at the Busy Budgeter. Her blog has changed my life completely, and her 90-Day Budget Bootcamp works wonders. The second is Dave Ramsey. Dave has developed multiple tools to help people claim their budget and get out of debt. He developed a Seven Baby Steps plan to help people get out of debt, and it’s something I started following in the last year or so.
Dave describes the snowball method several times on his Web site. It works by listing all your debts (except your mortgage) from smallest to largest. If two debts have the same or similar balance, list the one with the higher interest rate first. Your first step is to attack the first balance on your list. Throw any extra money at it that you can. Work a second job, sell some possessions, whatever you can do to get rid of the smallest balance.
The Snowball Builds
You’ll continue to pay the minimum on the remaining debts during this time. Once the smallest debt is paid off, you’ll add the payment of the first debt plus whatever extra you were throwing at it to the next debt. For example, imagine your smallest debt is a $50 medical bill with a minimum payment of $10, and the second smallest debt is a $250 credit card bill with a minimum payment of $25. You’ll pay off the medical bill as quickly as possible, by throwing extra money at it. Let’s say in two months you paid off the medical bill. Then you’ll take the $10 you were paying on it, and make your minimum payment for the credit card $35, plus whatever extra money you were throwing at the medical bill.
The snowball method is about behavior modification, according to Dave Ramsey. The small wins keep you motivated, and, more importantly, give you hope. When there’s hope, there’s motivation to keep going. Think of it when you first started your weight loss surgery journey. You began by making small changes to your habits. These small changes led to big loss on the scales, thus motivating you to continue changing habits to continue losing weight. The snowball method does the same thing with debt. You make small wins by paying off small debts, which leads to a big reduction in debt quickly. As you snowball debt, the reduction of your debt keeps you motivated and makes you feel like a debt-free life is possible.
Debt & The Avalanche Method
A second debt reduction strategy is the avalanche method. You’re going to again list your debts, but, this time, in order of highest interest rate to the lowest interest rate. You’ll attack the debt with the highest interest rate first. The thought behind this method is that you’re saving money on interest, and it’s true, you will. However, according to Dave Ramsey, it could take a while to see any progress which leads to burning out.
Say for example you have a credit card with a $500 balance at 7.5% interest and a store card with a balance of $2,000 at a 19.99% interest. Using the avalanche method, you’re going to attack the store card with the $2,000 balance first. Once it’s paid off, you’ll roll over the money you were paying on it to the credit card with a $500 balance. Chances are though, the $2,000 store card is going to take a while for you to pay off. You might lose motivation in the meantime and give up your dream of being debt-free.
Slowing the Avalanche
Dave Ramsey suggests that you could transfer the higher interest rate card to one with a lower interest rate. However, many of these balance transfer rates are introductory only and could increase over time. It may end up being higher than it was originally.
He also suggests that the avalanche method often leads to burning out because you aren’t seeing progress as quickly. Think of it as stalling in your weight loss journey. Maybe you have a great week of eating all the protein you should, avoiding carbs, eating lots of vegetables and hitting the gym. Yet, when you step on the scale, it hasn’t moved, or, worse yet, has gone up. You’re tempted to throw in the towel, after all, that hard work should lead to a loss. Well, eventually it will lead to a loss, but it’s those stalls and plateaus that end up discouraging us and making us want to eat a brownie while binging Netflix instead.
Which is Better?
I’m not a financial expert by any means, so don’t take anything I say as gospel or even expect it to work for you. Just like our surgeries, snowball debt reduction will only work if you work. Meaning, for you to reduce your debt and eliminate this stress in your life, you have to work at it. Figure out which method or a combination of the methods works best for you. I can’t tell you what to do with your money or which method is better for you. Only you can decide that.
Having said all that though, I recommend the debt snowball method. It’s hard to make changes. We’ve seen that with our surgeries. We’ve had to make changes to the way we eat, drink, live, exercise, sleep and a thousand other areas of our lives. However, the small changes we make add up to big results on the scale. Just like the snowball method, the small victories add up to big success. I know my personality thrives on achieving and accomplishing goals, and if I can’t see progress, I get discouraged. Perhaps you’re the same way. Those small victories give us the greatest tool of all – hope. Hope is so powerful, and can be extremely encouraging.
My Debt Reduction
I knew as I started on my weight loss journey that my debt was an area of my life that I’d have to tackle. It caused me so much stress, which often led to my stress eating and worrying. Between student loans, car loans and some credit cards, it was hard to see the light at the end of the tunnel. Thank God I found Rosemarie and Dave. Thanks to them and their wisdom, I was able to create the first budget that I was able to stick to. I also started using the snowball method to tackle my debt. I’ve paid over $5,000 towards my debt in the first four months of 2019 using this method.
While my debt reduction journey is far from over, and I’m always trying to find new ways to pay extra on my bills, I know I’m on the right path. Money no longer stresses me out the way it did before because I know I’m doing everything I can. I also have my faith in God that He will help me through whatever situation is thrown at me. I’m doing everything I can to snowball debt at this point, and I know there’s light at the end of the tunnel.
Surgery is Expensive
So why are we talking debt reduction on a weight loss surgery blog? As I’ve said, I believe it’s important to tackle the most stressful situations in your life so that they don’t sabotage you later. Money is the source of major stress for a lot of people. I want you to be successful on your weight loss journey, so I’m giving you the tips and tricks you need to not only take care of yourself physically but also mentally, financially and spiritually.
Not only that but weight loss surgery is super expensive! You may even go into some debt to have surgery. I know I did. However, when I paid off that last medical bill related to my weight loss surgery, it felt so amazing. I felt like my sleeve was finally mine, and it lifted a heavy weight off my shoulders. It was only possible thanks to the snowball method. I’ll forever be grateful for the lessons I’ve learned on my weight loss and debt reduction journeys.
Take Control of Your Debt
As we journey through weight loss surgery, chances are we’ll be faced with some sort of stress around money. If you’re like the average American, then I guarantee it’s going to affect you in some way. Taking control of your debt will help eliminate stress in your life, which will reduce your chance of stress eating. By using the snowball method, you’ll be more motivated to continue paying down your debt. Eventually, debt will be eliminated and another stress gone from our lives. Remember, even the slightest sphere of snow can become a mighty snowman. You just have to start pushing.
If this article gave you some great ideas to incorporate into your life, just imagine what other amazing strategies I have for you! Share this post on social media by clicking one of the sharing buttons, and don’t forget to join my email list! You’ll be the first to get updates, access to my new products and lots of tips, inspiration and motivation to help in your bariatric surgery journey. Just for joining, I’ll send you a free weight loss coloring chart, as well as some other pretty awesome goodies to keep you motivated. Join today!
It depends on who you ask. However, while you may pay less in interest over time with the avalanche method, the snowball method is more likely to keep you motivated to keep paying down debt. The small wins you make help keep you focused on financial independence.