KPLC 7 News, Lake Charles, LouisianaDebt free living pt. 2

Debt free living pt. 2

By Kristen Miranda

Posted by KPLC Staff:

CHARLOTTE, NC (WBTV) - Money Man Dave Ramsey says he's helped millions of people get out of debt using his debt snowball technique.

Step one was getting into the right mindset - the gazelle intensity.

Consumer Reporter Kristen Miranda shows us the signature move Ramsey uses to help folks eliminate debt.

It's a number Paige and Micah Tyson will never forget.

Tyson's: "54,511.64"

Say it one more time.

"54,511.64"

That's how much debt they accumulated in the first years of their marriage.

Tyson: "We started our marriage broke and debt free and then you get that first credit card and it starts going down from there."

Then they had that moment.

Tyson: "it's when it really hurts and you're sick and tired of your debt."

With drastic change required, they turned to Dave Ramsey, the nationally syndicated radio host who has helped millions get out from underneath their bills with what he calls the Debt Snowball.

Ramsey: "The more you get into it the more excited you get it's like yes, yes yes!"

Step one: Save one thousand dollars as an emergency fund so you don't have to put that new furnace on credit.

Ramsey: "Its not much, but you do it fast in a month; have a garage sale, whatever. Stop saving. No 401K."

Step two: List all of your debts smallest to largest. Don't worry about the interest rates - just the balance on the card. Pay the minimum payment on each except the smallest. That one gets any extra money you have each month until it's gone. Then attack the next smallest.

Kristen Miranda: Now here's the snowball part. Every time you pay off a debt add it's old minimum payment to your next debt payment. The payments snowball. Before you know it, the largest debt is gone.

Tyson: "When you list smallest to largest and then attack the little one with a vengeance - knock that one. That's like going on a diet and you have 3 pounds off. Hey, hey, this is working. We're doing this one down."

Finally, get rid of those credit cards. Go cash only.

Paige and Micah's debt is now gone.

Tyson:  "After 22 months we have paid off everything."

It has changed their lives.

Tyson: "Get the feeling of being free, having your debt paid off. And if you don't like it you can always go back in debt."

It's something they say they'll never do.