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I racked up roughly $42,000 in consumer debt in my thirties. I had a behavior issue rather than a spending concern. My attitude was, “I’ll get another month to think about it as long as the minimum is paid before the due date.”

I didn’t know my debt wasn’t decreasing until two years ago, despite how promptly I made my payments. Even though I stopped using them, they were actually increasing. Following that, I began paying close attention to interest rates on everything from my vehicle notes to my student loans.

I understood that not only were the majority of my debts the result of my own mistakes, but I was also paying them off incorrectly in a manner that was at least inconsistent with my nature. Every time I earn some extra cash from my gigs, I’ll add it to the card with the higher balance in the hopes that it will bend the inclination curve.

I was unaware of the interest rates I was paying at the time on any of my credit cards. I didn’t start paying attention until I ran into this Dave Ramsey video discussing how the Snowball method is the proven strategy for paying off debt.

What is a debt snowball

With the debt snowball, you get the satisfaction of not having to stress out as much about the biggest payment or interest rate. You can keep some financial control by paying off the debt with the lowest balance first.

Using the debt snowball method is:

1-Refrain from using the credit cards
2-Print all your debt statements and sort them by low to high balance.
3-Come up with a realistic payment you can make on the small balance while paying the minimum on the other ones.
4-Reach the goal faster. Any extra money you get, add it to the low balance.
5-Once you finish paying off that first card, add it to the minimum of the next low-balance card.

I was initially hesitant and thought that this didn’t make sense. Additionally, if you look at it mathematically, it doesn’t sound right because, let’s assume, the card with the greatest balance may also have the highest interest rate—wouldn’t paying the minimum amount be a bad idea?

The response is: Yes, that is true mathematically!

On the other hand, with the rate at which you’re paying off the low balance card, the high interest card won’t even have that much of an emotional impact.

It’s a behavior thing

Psychologists and researchers agree that it takes the brain 21 days to create a habit. It may take two to three months for it to ingrain itself into your mind.

I can vouch for it. You must be dedicated before making it a routine—you must perform the same behavior week after week, month after month, and year after year in order to make it one.

Here is a current illustration: Suppose you had three credit cards: the first carrying a balance of $13,000 at a rate of 22.9%; the second, $6,500 at a rate of 18.9%, and the third, $500 at a rate of 21.9%. On paper, it will be more reasonable to settle the $13,000 debt that has the highest interest rate.

The snowball strategy, however, allows you to pay the low balance in full first. In our case here, it’s the third card ($500). After paying off the first card in full, increase the minimum on the second card by that sum.

After you get used to living without the things you once thought served a purpose for you and have reduced your spending for two to three months in a row, it should be very difficult for you to go back.

It requires a lot of self-control. No matter how well or poorly your day goes, you must persist.

Related: Is debt consolidation right for you? First, learn about the benefits and drawbacks.

In Conclusion

Why is the debt snowball strategy the best one?  Picking a day and announcing that you will start a new habit is probably a losing strategy. I assume you’ve heard of the New Year’s resolution, right? Studies show that after the second month, a lot of people revert to their old behaviors.

However, the debt snowball approach provides a psychological boost. Because you experience some kind of satisfaction from only concentrating on the tiny goal, you become motivated for the quick wins and anticipate continuing to crave that energy.

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