Saturday, June 13, 2009

The Power of the Snowball – Part 3

Photo: marklarson

Is anyone else as excited as I am about the Debt Snowball process?

In Part 1, I talked about how Dave Ramsey’s Debt Snowball approach works. Then, in Part 2, I shared how to get the ball rolling and how you can benefit from it. I’ll wrap up this series today with tips on how to save extra money to build the initial momentum.

Finding an extra $500 a month isn’t easy, but finding an extra $5 here and $20 there is quite do-able. Rather than trying to come up with a large sum at the end of the month, break it down into manageable amounts. For us, one way we save a great deal is on our monthly food expenditures:

  • Packing Lunches – Taking the extra time to shop for and prepare lunches in advance saves us the $5 - $10 we each would spend daily buying lunch during the week.

  • Homemade Dinners – Rather than eating out a few times a week, we save money by stocking the fridge and freezer with healthy and convenient meals. Having options on hand really cuts down on our desire to eat out. When we have a craving for a restaurant burger ($10 each + tip), we fire up the grill and prepare burgers from the side of beef in our chest freezer ($1 each).

  • Family Outings – Whether we are headed to the zoo, the state fair, or on a road trip, rather than forking over cash for unhealthy meals on the go, we try to pack a small cooler with sandwiches, carrot sticks, fruit, and juice boxes.

Other ways to save money include comparison shopping to find the best deal on items and shopping around for the best rates on services. Always shop with a purpose, not for entertainment, and think about the value you will get out of each purchase, rather than impulse buying.

For a small amount of sacrifice, you can make substantial progress towards completing your debt snowball.

Your Turn: Have you been working on your debt snowball? What advice do you have for others? Are you thinking about it, but don’t know where to start? Leave a comment and share your thoughts.

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