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Use the debt snowball method to pay off debt faster from "summary" of The Total Money Makeover by Dave Ramsey
The concept of the debt snowball method is a powerful tool to help you get out of debt quickly. It involves paying off your debts from smallest to largest, regardless of interest rate. This method is based on the idea that small wins can provide motivation to keep going, even if it means paying a higher interest rate in the short term. By focusing on paying off your smallest debts first, you can gain momentum and see progress quicker. This can help you stay motivated and continue working towards your goal of becoming debt-free. As you pay off each debt, you can roll the amount you were paying on that debt into the next smallest debt, creating a "snowball" effect that accelerates your progress. While some may argue that it makes more financial sense to pay off debts with higher interest rates first, the debt snowball method prioritizes psychological wins over financial gains. This can be especially helpful for those who struggle with staying motivated or sticking to a debt repayment plan. The debt snowball method is a simple and straightforward approach to paying off debt. It doesn't require any complex calculations or financial expertise. All you need to do is list your debts from smallest to largest, make minimum payments on all debts except the smallest one, and put any extra money towards paying off that smallest debt. This method is all about changing your behavior and mindset towards debt. It's about building momentum and creating a sense of accomplishment that will propel you towards your goal of financial freedom. While it may not be the most mathematically sound approach, the debt snowball method has been proven to be effective for many people in getting out of debt faster.
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