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- Thread starter hoosier1104
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the snowball effect, based on the link you provided, is completely psycological, to make you want to put more money onto your creditors, by paying off a new creditor every couple months, which makes you feel like it's going faster, and makes you want to put more and more on... it doesn't in it's self, make it faster... if you and i had the exact same debts, and we were both to make the exact same payments per month, the difference being you putting it on low balance creditors, and me putting it on high interest (provided the minimum is paid on all) i GUARANTEE mine will be paid off faster... it's just easier to get discouraged my way, which is exactly what that dude says
Its clear you pick and choose what you read and absorb. Its part psychological and part mathematical. No matter which way you do it, smallest first works faster.
I used to have a significant amount of debt and tried the highest interest method and stuck to it no matter how hard it was, it barely moved the needle. In a little more than a year i payed off a third of my debt. Then i started listening to dave and in the following year payed off the rest of the debt using the debt snowball even though midway through that second year my income actually dropped (i left the service)
Claim what you want but the truth is the debt snowball is most cost effective means of paying off debt.
I used to have a significant amount of debt and tried the highest interest method and stuck to it no matter how hard it was, it barely moved the needle. In a little more than a year i payed off a third of my debt. Then i started listening to dave and in the following year payed off the rest of the debt using the debt snowball even though midway through that second year my income actually dropped (i left the service)
Claim what you want but the truth is the debt snowball is most cost effective means of paying off debt.
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I hate quoting myself but it was the very first sentence of my previos post.
That aside if you're convinced that your right, no amount of evidence will ever show you how wrong you are. And so i will not respond to you any longer in this thread, on this subject. See ya weezle!
to paraphrase, you're convinced that your right, no amount of evidence will ever show you how wrong you are...
plus, you spelled my name wrong
rockin86ranger
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Better option, skip the rent, water, electrical, gas, cable, internet, insurance. bill for a couple of months and pay it off even sooner. If you skip a couple of meals a day you could do it even faster!
Jraymer360
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maybe weezl's willing to donate money towards your debt to demonstrate that he's right! 
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My truck will be paid off the end of this month. I've been paying $600 a month on it just trying to get it out of the way. Put that in your pipe and choke on it!
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Good job, Bro!!! I always do that as well. I hate having debt.....it is nice to no to have anymore house payments!!!! If we have to use a credt card it is paid in full when the statement gets here.
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I'm generally a Dave Ramsey follower, and I agree with his idea of paying off the lowest balance off first for several reasons.
That said, mathematically Weezl is 100% correct on this. Every single time, you will pay less in interest if you pay off the highest interest rate first. There is no arguing against this, as it's just simple math. Dig around enough on DR's info and he clearly discusses this. It's not up for debate, just facts and math. If you want to look at the numbers, try this spreadsheet. It will let you put in all your debts and look at various scenarios to see the differences when you pay off things in different sequences.
The reason I subscribe to paying off low balances first is that it frees up income sooner and it lets you psychologically feel real progress as you eliminate debts. Each one you eliminate lets you push that income to the next debt. If you're paying off smaller items, then you quickly have 'extra' income that is available if you suddenly have a short month. If you're talking about a car loan with a high interest rate and several years to pay it off, you may have knocked out half of it but you're still stuck paying the full amount in a month that you have an unexpected bill and the amount you've paid off doesn't come back to help you out unless you've completely knocked out the bill. Hope that makes sense, I'm not sure I worded it very clearly.
That said, mathematically Weezl is 100% correct on this. Every single time, you will pay less in interest if you pay off the highest interest rate first. There is no arguing against this, as it's just simple math. Dig around enough on DR's info and he clearly discusses this. It's not up for debate, just facts and math. If you want to look at the numbers, try this spreadsheet. It will let you put in all your debts and look at various scenarios to see the differences when you pay off things in different sequences.
The reason I subscribe to paying off low balances first is that it frees up income sooner and it lets you psychologically feel real progress as you eliminate debts. Each one you eliminate lets you push that income to the next debt. If you're paying off smaller items, then you quickly have 'extra' income that is available if you suddenly have a short month. If you're talking about a car loan with a high interest rate and several years to pay it off, you may have knocked out half of it but you're still stuck paying the full amount in a month that you have an unexpected bill and the amount you've paid off doesn't come back to help you out unless you've completely knocked out the bill. Hope that makes sense, I'm not sure I worded it very clearly.
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Weezl is right from a mathematical standpoint. I think the problem is that the debt snowball isn't meant to get you out from under car or house payments, it's meant to get you out from under credit cards and deliquent bills and such, things with balances(hopefully) under $30,000.
The idea isn't to pay less interest up front, it's to reduce the number of people you owe money and interest to as fast as possible without making radical alterations to your monthly budget.
Under that premise say you have a total of $13,000 credit card debt spread across 10 cards that all have relatively similar (within 3 points either way) interest rates. You pay 20 a month on each and get a bonus check at the end of the month. You take your bonus, pay off the lowest balance and make your minimum $20 on the rest. Next few months you pay $40 to your lowest balance and (statictically) it should be about paid and you have two sums of approx $1050.00 that you are no longer paying interst on. Now you move to the next and pay $60 a month.
Run those numbers and see how much the difference is in interest paid since it accures monthly.
The idea isn't to pay less interest up front, it's to reduce the number of people you owe money and interest to as fast as possible without making radical alterations to your monthly budget.
Under that premise say you have a total of $13,000 credit card debt spread across 10 cards that all have relatively similar (within 3 points either way) interest rates. You pay 20 a month on each and get a bonus check at the end of the month. You take your bonus, pay off the lowest balance and make your minimum $20 on the rest. Next few months you pay $40 to your lowest balance and (statictically) it should be about paid and you have two sums of approx $1050.00 that you are no longer paying interst on. Now you move to the next and pay $60 a month.
Run those numbers and see how much the difference is in interest paid since it accures monthly.
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