You too must utilize the power of small actions. What is the biggest bang for the buck with the least effort? When it comes to fixing things, we need to build emotional momentum. Kinda like going to the gym. If you go back to the gym for the first time in ten years and work out like a mad dog, you may feel great that first day; but within a day or two, you will be so sore and in so much pain, you will likely never go to the gym again. Momentum rarely occurs after one crazy effort. Momentum builds slowly but relentlessly. Small, repetitive, continuous actions, chained together, build momentous momentum (say that one ten times fast).

In his extraordinary book, The Total Money Makeover, Dave Ramsey explains the “Debt Snowball.” It’s contrary to logic, but plays exactly into the psyche of all of us human beings. Ramsey tells us that logic would say to pay off our debts with the highest interest rates first, but that doesn’t build emotional momentum. It is getting to tear up a statement—any statement, because it is fully paid off—that gives you a sense of momentum and gets you charged up to tackle the next one. Ramsey explains that you should sort all your debts from smallest to biggest, regardless of interest rates. Only when two debts are a similar amount should the one with the highest interest rate be paid first.

Ramsey tells us to pay only the minimum on all the debts, except the one at the top of the list—the smallest one. Then put all your financial power into crushing that first debt as fast as possible. Once that first debt is wiped out, then tackle the next one on the list by adding to the minimum payment with the money you were using to pay the first debt. Once the second debt is paid off, go for the next, adding all the money being used to pay the second debt to the minimum of the third. See how the snowball grows? And see how your enthusiasm and excitement about eradicating debt grows? You will get more and more pleasure from not spending than you once did from spending. Suze and Dave would both be so proud of you.

But the trick to Ramsey’s method, and Suze’s, and mine (and anyone with one iota of sanity) is this: You cannot add new debt as you pay off old. That is just shifting money around, paying down one debt while building another. You need to get your Debt Freeze on. And then destroy debt, once and for all.


Step 1: Start the Debt Freeze. Stop any recurring payments and kill off anything you don’t need. Do whatever it takes to get your “monthly nut” down to 10% lower than your Instant Assessment suggests it should be.

Step 2: Start the Debt Snowball. Pay off your smallest outstanding debt first. As you wipe out each bill with recurring payments, use the freed-up money to tackle the next smallest debt.

Bonus: Join the “How healthy is your business?” club. Make your Profit First t-shirt and then post a selfie of you wearing that shirt on Facebook, Twitter or Google+. Be sure to tag me when you do it.

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