#11 Four Things To Remember When Paying Off Debt.
Your life does not get better by chance, it gets better by change. Jim Rohn
1. Pay off your debts from smallest to largest.This is a Dave Ramsey thing – the debt snowball. It is not my concept. My concept would involve spreadsheets, calculations of interest rate to balance ratio with consideration given to the size of the monthly payment. My concept would fail.
2. Personal finance is more about behavior than math. Also a Dave thing. If we were math magicians, we would not have been in debt in the first place.
3. Paying off the smallest debt first gives you momentum. Once you have momentum it takes more force to stop it than to keep it going. That’s a physics thing. Mathematically, it usually makes more sense to pay off the highest interest balances first. This is not about math, it’s about several small victories over a long period of time.
4. It works. Not in theory. In practice. We slayed over $127,000.00 worth of Dragon from the smallest debt to the largest debt.