Pay off debts starting with the smallest from "summary" of The Total Money Makeover: Classic Edition by Dave Ramsey
The concept of paying off your debts starting with the smallest one is a key principle in achieving financial freedom. This method, also known as the debt snowball, involves listing all your debts from smallest to largest and then focusing on paying off the smallest debt first, while making minimum payments on the rest. By tackling the smallest debt first, you experience a quick win and a sense of accomplishment, which motivates you to keep going. This approach is psychological in nature, as it gives you a sense of progress and momentum in your debt repayment journey. As you pay off each debt, you free up more money to put towards the next debt on your list. Over time, the amount you're able to put towards each debt grows, accelerating your progress towards becoming debt-free. While some may argue that you should focus on paying off debts with the highest interest rates first, the debt snowball method emphasizes the importance of behavior modification. By starting with the smallest debt, you build confidence and develop good financial habits that will serve you well in the long run. In addition, the debt snowball method simplifies the debt repayment process by breaking it down into smaller, more manageable steps. This helps you stay organized and focused on your goals, making it easier to track your progress and celebrate your achievements along the way.- The key to successfully implementing the debt snowball method is consistency and discipline. By committing to the process and staying motivated, you can take control of your finances and work towards a debt-free future.
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