Pay Off Debt

Why Your Debt Snowball Failed and How to Fix It Fast

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Starting and completing the debt snowball are wildly different things.  A lot of people start their debt free journey with enthusiasm, and most end up wondering why their debt snowball failed…

They are left confused, angry, and defeated.  If you find yourself in that situation, you need to not only read this page…you need to book mark it.

The debt snowball didn’t fail because of some fundamental breakdown within its process.  It most likely failed because your personal processes aren’t quite fine-tuned, yet.

I’ve been there.  Our debt snowball failed, many times.  We were buried in $109,000 of debt, and it felt hopeless.  We started and failed our debt free journey a handful of times.  Each time learning more and more.

Luckily, I’m either too stubborn or too stupid to quit for good.  By ignoring the temptation to quit, we learned how to successfully complete your debt snowball.

Here’s why your debt snowball failed… and how to fix it!

You’re Not 100% Committed

Take no offense, but we’re going to talk about some hard truths today.  One potentially  gigantic reason your debt snowball failed is because you’re not 100% committed to the process.

Becoming debt free requires patience, persistence, and a big ol’ dose of intestinal fortitude.  Paying off debt is such a long and grueling process.

Pure, unwavering commitment is a must.  There are going to be millions of reason to quit, and another million temptations along the way.

You must shut them out and forge ahead.  I know this for a fact.  We started and quit many times.  Mainly because we didn’t believe we could do it.  So, we decided “you only live once” and we rationalized more childish spending.

Our lack of commitment added years on to our debt snowball.

Your Budget Stinks

Prepare to have your mind blown… 68% of Americans do not have a household budget!  They wander aimlessly each month, not knowing where their money is going, or why it’s going there…

Not having a budget will put your debt snowball on the fast track to failure.

How can you complete this gigantic debt free journey if you’re not planning, tracking, and scrutinizing your spending habits?  A budget is a must.

Money has this crazy way of vanishing into the silliest of places when it’s not being watched daily.

If you’ve created a budget and your debt snowball failed, you need to re-evaluate both your budget and your processes around budgeting.

This was another area we failed in.  We created a budget… well… kinda.  We wrote down our bills and when they were due.  We didn’t track our spending, or allocate all of our money each pay period.

It looked good on paper, we were sending extra money toward our debt…but we would always end up over-drafting our account or having to transfer money out of our savings to cover our silly spending habits.

The next pay day would come and we would have to put money BACK into our savings account to replenish the money we moved the previous week.  It only took a few months before we gave the whole debt free idea a big middle finger!

It kicked our butt.  Well, we actually kicked our own butt by not utilizing a budget appropriately.  Sound familiar?  That’s ok.  We’ll fix this later!

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You Haven’t Trimmed Expenses

Another staple ingredient to becoming debt free is cutting extra costs.  While others are trying to keep up with the Joneses, you’re going to be hammering away at your debt snowball.

If you’re still splurging on unnecessary wants and subscriptions, you’re going to be left wondering why your debt snowball failed.

The reason will be hard to accept, but it will be because you haven’t effectively trimmed your monthly expenses.  Things like Netflix, Hulu, mail subscription boxes, gym memberships, and many other modern conveniences need to be cut out… for a while.

We saved over $500 a month by auditing and trimming our monthly bills.  We literally found over $500 a month… the sad part was that we didn’t even realize we were losing it.  Poor spending habits don’t sting when they accrue gradually.

According to the Leichtman Research Group, the average cable bill is $107 a month.  Or, just under $1,300 a year!  When you add this in with internet, other monthly entertainment subscriptions, inflated insurances prices, gym memberships… you’ll find hundreds of dollars a month that can be utilized for your debt snowball.

Money you forget you even had… (mind blown)

Not trimming these expenses will make a tedious process that much more difficult… it’ll set you up for failure.

You’re Not a United Household

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Debt freedom is a team sport.  If you’re home has one saver and one spender… you’re debt snowball is going to fail.

Much like weight loss, your debt snowball is your financial diet.  Living with someone who orders pizza every day will cause you to cheat on your diet too much.

Too much cheating on your financial diet has the same repercussions. Instead of gaining weight, you’re going to gain debt… and that can be just as rough on your heart!

It doesn’t matter how much you save, or how much you budget…you cannot out work a spender.  It’s impossible.  Without a united force, your debt snowball will fail… and it’s going to be a tumultuous time in your house.

You’re Bored

Debt freedom isn’t a quick and easy process. It’s tedious, it’s boring, and it’s easy to fall victim to boredom.  Watching your poor friends spend money they don’t have on trips they can’t afford will make you feel like you’re missing out on  life.  Doing the same stuff every single day, week, month… You’re stuck in a crappy remake of groundhog’s day.

So, you quit…  Dust off the credit card and book a trip fueled by rationalization and bad decisions… BEEN THERE!

Boredom isn’t discussed enough when folks reminisce about their debt free journey.  I’m going to use the  diet reference again, eating the same meals every day gets boring.

The urge to cheat on your diet and mix it up will lead to poor dietary decisions, and those decisions compound and derail your diet.  Financially, it’s the same.  You’re in a routine of budget, pay day, bills, debt payments, budget, pay day, bills, debt payments… this goes on for many months, even years.

The desire to take a break and go on vacation, or make a big purchase feels sooo good.  It’s like a moist piece of chocolate cake just staring at your dieting ass.

Just one bite, or one trip.  One trip is harmless, right?  How much damage can one little vacation cause?  Well, it breaks your routine and scratches that short-term gratification itch… and it feels sooo good.

After one scratch, the second gets easier, and easier.  Pretty soon your debt snowball has failed and you’re back to square one.  Or worse yet, you’ve actually accrued MORE debt.

Boredom. Kills. Progress.

Read that again…

How Do You Fix These Problems?

We’ve covered the many reasons your debt snowball failed.  Now, it’s important to fix these issues and conquer your debt.   Forever.

You’re snowball might have failed for one reason, or many.  It doesn’t matter.  If you want it to work, it can.  You just need to re-evaluate your plan.

Is The Debt Snowball Right For You?

The debt snowball isn’t the only way to become debt free.  There are other options. Such as the Debt Avalanche (debt-stacking).

The debt avalanche is similar to the snowball, but instead of paying off your debt in order of balance, you’ll pay them off in order of interest rate (high to low).  The avalanche will save you money, but it’s really not any “easier”.  It’s just… different.

Personally, had I known about the avalanche I would have utilized it at some point in our debt free journey.

I would have started with the debt snowball, paid off a few accounts, got those succulent wins and then attacked our high interest debt.

I think combining these two debt repayment methods is the most intelligent way to pay off debt.  It allows for emotional wins, and then it allows you to save money.

The emotional aspect of a debt free journey isn’t talked about much, but it’s real.  Does the thought of losing money to interest rates drive you nuts, or do you hate feeling like you’re not winning enough?  Each plan has it’s pros and cons…you just need to figure out what fits your life, and build a debt pay-off plan that you’ll stick to.

Don’t be afraid to mix and match ideas.  Personal finance is just that, PERSONAL!  No matter what some guru tells you, everyone’s situation is different.

If you’re still not sure which is right for you, document your debts on a free debt tracker spreadsheet and visualize your balances, interest rates and the total interest you’ll pay over the life of a loan.  Once you see your numbers, the right decision will be clear!

Create A Budget That Works

Budgeting can be an incredibly freeing exercise.  Sticking to a budget is another story.  That’s why those standard budget templates rarely work for everyone.

The 50/30/20 budget is probably the most popular “template” and it’s a great starting point.  Fine tuning the budget to meet your specific needs is important.

I prefer to complete a zero based budget. This means that I budget every penny, every pay day.  I don’t like to actually leave $0 in my bank account.

We leave $100 just in-case I screw something up, this $100 is enough of a safety net to catch errors before over-drafting our checking account.

I don’t follow a standard percentage budget either.  We create a new budget every two weeks and make changes as needed.  I loathe standardization, both personally and professionally, and the ability to manipulate our budget ever pay period is critical to our staying power.

When you’re creating your budget, keep in mind that your debt snowball doesn’t have a time limit or any rules for completion.

Create a zero-based budget each and every pay period.  Calculate your take home pay and subtract your mandatory living expenses (rent/mortgage/gas/food/pet supplies/utilities).

Simply subtract your bills from your income and see what’s remaining. Typically, it’s going to be way more than you expected.

Why is there more money?  Well, you haven’t calculated in any of your money leaks, or “fun” money yet.

Now what the heck do you do with that left over money? 

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Every week, you’ll have a budget meeting with your spouse prior to pay day.  You’ll ask your loved one to participate and discuss any wants or needs that should be calculated in.

I don’t believe you should just leave a certain percentage for mindless fun money.  At least not while you’re working on your debt snowball.  As much as I loathe the term “gazelle intense”, you really should keep some level of urgency behind your debt free journey.

Leaving too much fun money breeds poor spending habits.  If there is something you really want, simply discuss it at the budget meeting, and budget it in.

This will become a bi-weekly tradition and it will set your debt snowball up for success.

Creating a “new” budget every other week will allow you to  build in flexibility.  If you need some extra cash on the next budget, great.  Add it in.  If you don’t, even better… send it to your debt snowball.

Stop assuming that the only way to win is to deny yourself every single “want”  in the name of gazelle intensity.  Create a zero based, flexible budget that works for your family.

Do this and the process gets exponentially easier.

Create Small SMART Goals

Small measurable goals are the way to conquer a gigantic project.  And your debt snowball is a gigantic project.

Create many small goals.  A quality goal is : S.M.A.R.T

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Time Specific

So, you might be asking why you should create small goals when your real goal is debt freedom?  Big action is completed one step at a time.  And, it’s the same when it comes to your goals.

Small goals are great for a number of reasons:

Small steps create big action.  By creating many small goals, you’re most likely to stay motivated to attack each step.  Paying off $109,000 sounded impossible when we looked at the big picture.  When we decided that we wanted to pay off the first $1,000, it actually seemed easier and motivated us to stay on track.

Small goals create momentum and habits.  Each time you “win” you feel better about yourself.  You feel better about your ability to crush the next goal, and then the next.  Every time you cross off a goal, you’re actually growing stronger and creating the necessary habits needed to cross the final finish line.

The debt snowball is a method built around smallish goals.  You start with your smallest balance, and then start to work your way up.  Each balance is a pre-set goal.

I say, take it a step further.  Create goals within those goals.  Maybe your first goal is paying off the first $500, or $1,000 in debt.

Even if that debt carries a balance of $10,000… create a smaller goal to help keep you motivated!  We all love to win, right? I know I sure as hell do.  If I have to wait months and months for each victory, I’m more likely to quit out of a self inflicted feeling of defeat.

Our ability to set small SMART goals kept us on track, and allowed us to pay off our total debt balance.  Create your own goals and have fun doing  it!

Celebrate Your Victories

If your debt snowball failed because of boredom, you might need to read this short section a few times…

Creating many small achievable goals will set you up for many victories.  And victories should be intelligently celebrated!

A nice shot of Dopamine to the system goes a long way.  Celebrating, from a psychological standpoint is incredibly important.  The rush of endorphins changes the way you think.  And it increases your staying power.

Think of some financially intelligent ways to celebrate with your family as you navigate your debt snowball.

Maybe it’s going out to dinner or going to see a movie or show.  Whatever floats your boat, just be sure you budget it in and DO NOT put the costs on a credit card.  Never let a victory celebration result in more debt.  No, no… Never!

Celebrating with your family will strengthen their commitment to the debt snowball as well.   That’s why it’s important to involve your family in the planning process.  Remind them that as you pay off more and more debt, the celebrations can get bigger!

Once we paid off the last of our $109,000, we literally went to Disney.  We hadn’t taken a vacation in years, and this was how we celebrated.

Taking a vacation after becoming debt free was amazing.  You can do this too, just keep chipping away at your small goals until you get to that big beautiful finale!

Create a Debt Free Vision Board

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Visualization is a wildly powerful tool.  According to Psychology Today “A study looking at brain patterns in weightlifters found that the patterns activated when a weightlifter lifted hundreds of pounds were similarly activated when they only imagined lifting. “

Simply imagining or visualizing your dreams will help you actually achieve them.  If you don’t believe me, ask Tiger Woods.  He’s been using this powerful tool for decades… and he most likely stole the idea from the Soviets who used it to help their athletes bring home Olympic medals.

Did your debt snowball fail because you couldn’t picture life without this financial parasite latched onto your wallet?  Well, it’s time to start to use this powerful tool to help you succeed!

What does debt freedom look like for you?  Can you imagine life without it?  What would you do?  Where would you go?  Take those visualizations and make them tangible by creating a vision board.

If debt freedom is a trip to the beach, create a board full of inspiring beach photos and beach related items.

A vision board is simply a collection of images or words that are meant to keep you motivated.  It might sound silly, but remember… professional athletes rely on visualization to succeed every single day.

A debt free vision board can be a collage of anything that motivates you.  Create one, look at it every day, and keep the motivation going.

If you can’t imagine life without debt, how do you expect to ever get to that life?  Don’t let your debt snowball fail because you can’t visualize a debt free life.  You most certainly can become debt free.  Just imagine it!

Create a United Front

21% of divorces end because of financial concerns…  Getting out of debt requires equal participation from everyone in the home.

If you’re debt snowball failed because your financial home isn’t united, correcting this should be a priority.

The first step is talking about money with your honey.  It’s uncomfortable, it can lead to a fight, but it’s necessary.

Here are some tips to help you have a successful money conversation:

  • Deciding when to attack this topic is important. Plan your money conversation after a relaxing day, not after a stressful work day
  • Admit your mistakes
  • Don’t point out your partner’s mistakes
  • Show your partner exactly how much debt you both have (your debt is their debt and vice versa)
  • Passionately talk about why you want to become debt free
  • Actively involve your partner in the planning process
  • End the conversation if you or your partner become upset, defensive, or angry. Fighting is NOT an option.

Our home wasn’t always a united front when it came to our finances.  We didn’t really fight about money, but we didn’t really talk about it either.

Our lack of communication led to us frequently over drafting our checking account.  It prevented us from making any measurable headway on our debt snowball.  It wasn’t until we sat down and looked at our spending habits, our debt, and imagined a life without debt that we made measurable progress.

We each talked about our poor spending habits, we each owned our mistakes, and we agreed to work on our debt snowball together.

After that, it was so much easier to attack our debt.  We became an unstoppable force and you can create this in your home too!

Final Word

Don’t fret or give up if your debt snowball failed.  Failing is ok, quitting isn’t.  Take some time to evaluate where your previous plan went wrong.

Use the tools and tips provided to build a personal plan that will result in success.  You’re making a decision to become debt free, and it’s not easy.

It’s going to be a long journey and there will be bumps along the way.  Don’t mistake a bumpy road for an impassable journey.

You can get out of debt, and your debt snowball will be successful.

You got this!

Please let us know how your debt snowball is going in the comments below!  I love to hear how you’re doing!!

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