• Kyle Fowler

Baby Step Two: Pay Off ALL Non-Mortgage Debt ASAP Using the Debt Snowball

Updated: Dec 8, 2020

You’ve submitted to a new way of doing this “personal finance” thing. You have $1,000 in the bank - set aside as a starter emergency fund (Baby Step 1). Now, it’s time to start really having your money work for you by paying off your non-mortgage debt. And we are going to use the debt snowball method to do it.

It's time to roll up your sleeves!

Your most powerful wealth-building tool is your income. We can’t build wealth when we are giving all of our income away in the form of payments. The debts we owe are roadblocks that we need to bust through. We are not borrowing money again. This changes now!

A reminder for this step: we are still NOT using money for investing, saving for college, going on vacation…we’re getting out of debt. We’re staying focused. And we’re going to do it one bit at a time.

Take all of your non-mortgage debts and write them down in a list from smallest debt to largest debt. As you work through this step, you’re paying minimum payments on all of your debts. With anything extra you can squeeze out of your budget, you’re going to ATTACK the smallest debt with a vengeance. Once that smallest debt is gone, you take all that money (minimum payment plus anything extra you’re squeezing out of your budget) and throw it onto the next debt. Keep repeating this cycle, knocking out one debt at a time.

Now, if you’re a nerd (like me), you would say that paying off debts by order of highest interest rate to lowest interest rate (Debt Avalanche method) would save even more money - and you’d be correct. HOWEVER, personal finance is 80% behavior and 20% head knowledge. If we were doing math, we wouldn’t have the credit card debt. We feel the wins of paying off the debts using the snowball method, which keeps us going.

Here something that kept us motivated:

I made a debt payoff thermometer. This was a visual representation of our progress. We saw it every day, and it kept us focused on reaching our goal!

This step may take you no time at all. For my wife and me, it took us a little over two years (26 months). Staying the course, staying motivated, staying focused is key. Your budget is going to be a priceless tool throughout this process. And the more you’re willing to sacrifice, the faster you’ll get through it.

This step probably feels radical, and to most, it is. Remember: 78% of Americans are living paycheck to paycheck. This is the cycle most people will never break free from. But we are determined to not be "normal." So, we are prescribing an extremely effective medication for the financial infection that is taking place.

“No discipline seams pleasant at the time…but it yields a harvest of righteousness.”

I promise it works. And I promise you can do this. You just have to decide you can.

Now, get after it, flippers!

Here is an article to help answer some of the more common FAQs about Baby Step 2:

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Kyle is the founder and certified financial coach behind Financial Flippers. You can learn more about Kyle and what he offers by visiting his website:

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