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<\/figure>\n\n\n\nIn this example, you have a total monthly minimum\npayment of RM 700, and with the budget that you’ve set, you’ll still have RM\n300 remaining. What do you do with this extra money in your budget? After\nmaking all of the minimum payments, you’ll be putting that additional RM 300\ntowards your smallest debt, Credit Card A.<\/p>\n\n\n\n
You’ll do this every month until Credit Card A is\ncompletely paid off. Once that’s done, your debt will then look like this: <\/p>\n\n\n\n What happens now is that the money you were using to\npay Credit Card A can now be put towards your next smallest debt, Loan B,\nthereby repeating the process. As each debt is repaid, you can then roll over\nyour extra money into larger and larger repayments!<\/p>\n\n\n\n There are a few reasons why this method is successful\nin assisting those struggling with debt.<\/p>\n\n\n\n Firstly, this method has positive effects on your mind\nand your emotions. As mentioned earlier, debt can be emotionally stressful,\nespecially if you have multiple credit cards and loans to pay off at the same\ntime. Following the Debt Snowball method, you’d be focusing on one debt at a\ntime instead of feeling like you’re fighting all of them at once. <\/p>\n\n\n\n Second, this strategy keeps you motivated. When you\neliminate the first debt and make progress, you’ll feel an immediate sense of\nachievement! It’s essential to feel this way because paying off your debt is a\nlong-term process that takes discipline and dedication. Without progress to keep\nyourself motivated, paying off your credit cards and loans can feel like an\nendless battle that’s impossible to win. Targeting your smallest debts first\nallows you to feel that sense of progress sooner, keeping you driven to keep on\ngoing until all that debt is gone!<\/p>\n\n\n\n The third reason why this strategy is popular is that\nit makes thinking about debt simple, and that’s great for people who prefer\nfocusing on just one thing at a time. Others might prefer going into greater\ndetail, looking closely at the numbers and doing a lot of math. Is one approach\nbetter than the other? Not necessarily, as it’s very subjective. You should\nalways figure out what works best for you. The Debt Snowball method might work\nfor some, but not others. The ‘best’ debt strategy is whichever one you can\nfollow consistently. It’s whichever one that helps you stay motivated to keep\non going until you reach your ultimate goal: to eliminate all of your debt.<\/p>\n\n\n\n Before following this or any other debt management strategies, you\u2019ll first need to gain a clear understanding of what your financial health is currently like. With your MyCTOS Score report, you’ll get a full snapshot of your debt and get tips on how to improve your credit score. Best of all, checking your CTOS score over time and watching it improve will motivate you even more as you continue working through all your debt!<\/p>\n\n\n\n![\"\"](\"\/\/ctoscredit.com.my\/creditfinder\/wp-content\/uploads\/2019\/10\/Monthly-expenses_B.jpg\")
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