Broker Check

The Snowball Effect

May 18, 2020

The best way to tackle any large task, whether its building a wall or paying off a mountain of debt, is to mentally break it down into smaller, manageable tasks. It’s very easy to overwhelm yourself by only focusing on the end result instead of the journey to get there. One of my all-time favorite motivational videos is actually an interview of Will Smith by Charlie Rose.  Will Smith describes how he and his brother, children at the time, built a huge brick wall in their father’s shop. They took the task “one brick at a time”, only focusing on laying each brick as perfectly as it could possibly be laid, one at a time.


One area where people tend to get easily overwhelmed is when it deals with their debt. They say “I’m never going to be able to dig myself out of this HUGE hole”.  Let’s face it, life happens and debt mounts up. Even to the smartest and most successful people. We’re all human. And what are humans good at? Being humans… So, if you have debt, you’re not alone. Don’t stress and look at it like it’s a mountain to climb. Instead, look at it in pieces. Take your debt one credit card/loan at a time. While you will still need to make your monthly premium payment for all of your loans, you should focus on paying extra on your lowest balance. Put all of your extra monthly savings towards this card. Once you get this liability paid off, you then take that full payment amount and apply it to your second lowest balance. This method is considered the “Snowball Effect”. With this method, you’re looking to just hit some “singles”, or achieve small wins. It’s an easy and straightforward process that can help you quickly eliminate your debt!


You may also want to consider consolidating your debt if you’ve held it for some time. There may be an opportunity to consolidate your debt into a new, lower interest loan. This is a great way to reduce the number of creditors you have to deal with and save you interest in the long run.


If you know you need to do something but don’t know where to start, please don’t hesitate to reach out. We’d be more than happy to help guide you in the right direction. We’re here to answer any questions you may have!


Steven Dengler, CFP®

Financial Advisor / Director of Planning

Your local Towson Financial Advisors

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Mosaic Asset Partners, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results.