Brilliant methodology. Paying off the smaller debts 1st makes people FEEL successful. Must consider how people FEEL or it just wont happen.
Oh so true. Most people fear change so much they rarely get started. Having real short term reachable easy goal, can motivate the behavior of so many.
Concentrate your efforts on paying off your smallest debit 1st. Pay just the minimum on ALL your other higher balances. Otherwise you will dilute your efforts and accomplish nothing. Later, and once you've paid off your smallest debit, focus on the next smallest debit by redirecting the amount you were paying on the smallest debit to the next smallest debit adding to the minimum you were paying (called compounding).
"You need some quick wins in order to stay pumped up about getting out of debt! Paying off debt is not always about math. It’s about motivation. Personal finance is 20% head knowledge and 80% behavior. When you start knocking off the easier debts, you will see results and you will stay motivated to dump your debt," says Dave Ramsey.
The principle is to stop everything except minimum payments and focus on one thing at a time. Otherwise, nothing gets accomplished because all your effort is diluted. First accumulate $1,000 cash as an emergency fund. Then begin intensely getting rid of all debt (except the house) using Dave Ramsey's debt snowball plan. List your debts in order with the smallest payoff or balance first. Do not be concerned with interest rates or terms unless two debts have similar payoffs, then list the higher interest rate debt first. Paying the little debts off first gives you quick feedback, and you are more likely to stay with the plan.
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