QUESTION: Barbara on Twitter wants to know how to use the debt snowball if her budget can’t support all of her minimum payments.
ANSWER: You don’t. Your first goal is to get and be and stay current. Something’s got to give. You’ve got to sell something that’s got debt on it to get rid of the debt like that car payment. You may have to amputate the Tahoe. Something’s got to go away, right? Or you’re going to have to take an extra job or you’re going to have to sell something or you’re going to have to take an extra job or you’re going to have to sell something. Something’s got to move here. You’re not in Congress.
You can’t continue to be obligated to pay more than you have coming in. You have a problem. So don’t go there. I would clean that mess up immediately. You have to get current before you can start your debt snowball. Once you’re current, your first Baby Step is $1,000 in the bank, and your second Baby Step is to begin the debt snowball listing your debts smallest to largest.