How to get out of debt using Dave Ramsey's debt snowball

Financial advisor Dave Ramsey gives advice on how to get completely out of debt using a technique called the debt snowball. The debt snowball takes advantage of human emotions and energy to get one excited about paying off debt so that it actually gets done.

	Write a budget each month before the month begins where you take your household's take-home pay and allocate it to various categories (food, clothing, fuel, insurance, housing, various debts, etc).
	If you are not current with any creditor, then become current. You may be able to negotiate settlements at a discount.
	Once current, pay minimum payments on all debts to keep them current. Pay no extra on any debt at this point. Do not acquire any additional debt.
	As quick as possible (optimally in a month or less) save up $1000 and put it in a bank account to be used only in case of an emergency. This money is to ensure that you do not go into more debt if an emergency comes up during the process of getting out of debt.
	List all debts except the mortgage from smallest payoff balance to largest payoff balance. (Not from smallest to largest payment, and not from largest to smallest interest rate!) Continue to pay minimum payments on all debts but the very smallest.
	Pay as much as you possibly can towards paying off the smallest debt. Once the debt is paid off, enjoy the feeling of having eliminated one debt. This provides the motivation to continue and is the primary reason that this method is so very effective. Now that that debt is gone, use the extra money that you don't have to spend on that debt to work on paying off the next smallest debt. Each time you pay off a debt, you have that much more money to work on the next that, akin to a snowball rolling down a hill and collecting more snow (hence the name). Continue until the last debt has been paid in full and never borrow money again.