Dave Ramsey advocates the Debt Snowball method, which emphasizes paying off the smallest debts first for quick victories. This approach, while possibly resulting in more interest paid over time, is intended to motivate individuals struggling with debt. By paying the minimum on all debts and directing extra funds to the smallest one, individuals can build momentum as debts are eliminated. Though it may mean delaying more expensive debts, Ramsey believes the psychological boost from achieving quick payoffs is crucial to long-term success in debt management.
Ramsey believes in a method called the Debt Snowball method. This approach is focused on paying off the smallest debt first to gain quick victories.
Paying off small debts first may lead to paying more interest over time, but it offers motivation to many who are struggling with debt.
The Debt Snowball Method builds momentum, as each paid-off debt provides motivation to tackle the next, regardless of interest rates.
Despite mathematical reasoning suggesting to pay off high-interest debts first, Ramsey emphasizes the psychological benefits of quick wins through the Debt Snowball.
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