The Dave Ramsey Debt Snowball - Does It Work?

People don’t get into debt because they don’t understand how debt works. They understand that if you don’t pay off your credit card every month you will have debt and interest to pay.

The debt snowball strategy has gotten a lot of attention over the years. The strategy is that you list all your debts and what the monthly payment is. If you have extra money to put towards debt, start with the smallest debt first and pay it off.

When that debt is paid off you just add the amount you were paying them to the second smallest debt. This way as you are paying off your debts, your payments being paid to the other debts increases like a snowball rolling down hill.

Why does this strategy work? It has to do with having small successes to help you stay motivated. It might make more sense financially to put your money towards the debt that has the highest interest rate first, right? By paying off the smallest debts first, the number of debts you have decreases. These small successes give you hope that you can actually be out of debt and also increases your motivation to get and stay debt free .

The brilliant part of the whole strategy is that it accounts for human psychology. Remember how I said earlier that people don’t get into debt because they don’t understand math? People aren’t stupid, they just make bad choices sometimes when it comes to money. As they pay off those small debts they feel they are accomplishing something and it drives them to do more. Whether you agree with the debt snowball strategy or not, the facts are that it does work.