Snowballing

ThatKiss

Deciding whether to go with the avalanche or snowball methods is entirely personal choice, and it may be that the best option for a particular person is one, the other, a hybrid of both or even something completely different!

For example, if there's multiple debts with a couple of quick wins, then it might be worth paying those off in order to free up cash to throw at a larger debt with a higher rate of interest, or even to ease the pressure by reducing the sheer number of minimum payments going out.

Everybody has different motivations and different thought processes - as long as their method leads to the desired result there's no right or wrong answer.

I was lucky in that all my debts were on 0% deals when I had my lightbulb moment and the motivation became paying them off before those deals ended - over 2 cards I think I had four different end dates so I was able to treat each of those as a separate target which gave a number of "wins" rather than a large card and a small card, and made it easier to keep the momentum going.

[Deleted User]

Make sure you at least understand the range of rates you have on your debts before using the Dave Ramsey method.

A poster on here a year or so back listed half a dozen debts, beginning with 1k at around 5% on a credit card, through to 8k to someone like Sunny at >40%.   One poster who always slavishly followed Mr Ramsey immediately advised to tackle the debts from smallest to largest, which would have been madder than Mad Jack McMad.

ChrisLV

Highest-interest-first is unquestionably best from a mathematical perspective, but my impression is that snowballing produces better results more often because of its superiority in maintaining motivation. So I think it comes down to being honest with yourself about whether you can maintain motivation and discipline while following the mathematically correct option of highest interest first. Personally, I mostly use the highest-interest-first approach, but whenever I see that a long-term debt has gotten small enough that I can knock it out fast, then I tend to do it and bank the motivational boost.

Still, I do catch myself wondering, 'If I'd followed a classic Dave Ramsey snowball approach over the last few years, would I have been more gung ho about my debt payments and actually be further ahead than I am now?'

Andyjflet

Personally DR worked for me, I had six separate debts, and the motivating and nature of now only having two now after clearing the others within 6 months was very helpful to my mind, the smallest was only £127, even simple things like looking at my DD mandates and seeing 4 of them cancelled, highly motivating. 

ryanm8655

Without wanting to derail this thread too much with debates around motivation...it completely depends on the situation. The method can work but it has its flaws. If it works for the OP then great. But if your debts are:
£6k at 40% interest
£5k at 0%

£10k at 27%

And you only have £500 left after minimum payments, then it’s still going to take ages to pay off that £5k debt and you’ll likely have fallen off the wagon, if you’re relying on the gratification of clearing a particular balance in full for motivation. It’d be madness to tackle the smaller 0% debt before the 40% debt in that situation.

The mathematical approach is always going to be the quickest way to debt free, if you can commit to it. Personally, I’ve found other ways of keeping myself motivated e.g. looking at how much less in interest I’m paying each month by clearing highest interest first. 

The most important thing is changing that mindset and getting to the root of your spending issues and really that comes down to budgeting, however you choose to tackle the debt.

Fireflyaway

I am a fan of Dave Ramsey and the snowball method worked for me, purely because I could see that I'd paid off a debt quite quickly. It made me motivated to want to tackle the next one. I guess different people work best in different ways so you should do whatever gets your debt paid off the quickest. I think Dave Ramsey works on the principle that if you followed what was 'mathematically correct' you wouldn't have got into debt in the first place. It's more about addressing behaviour than using maths. 

ThatKiss

ryanm8655 said:

The mathematical approach is always going to be the quickest way to debt free, if you can commit to it. Personally, I’ve found other ways of keeping myself motivated e.g. looking at how much less in interest I’m paying each month by clearing highest interest first. 

The most important thing is changing that mindset and getting to the root of your spending issues and really that comes down to budgeting, however you choose to tackle the debt.

Agree Ryan's statements above, albeit there's a case for being lenient with budgeting depending on the stage you're at. Given I'm (almost!) debt-free now, I've been pushing money towards savings, but it's good to recognise that doesn't always work as expected and it's more an achievement not to drop back into debt than it is to have x amount savings!