Just like jogging with the wind at your back, it is a nice little boost to use our emotions to give us a little edge. Knowing that we are emotional beings, the key is to use our emotions to our advantage. These are all emotional states that each one of us could feel on any given day!! We get let down, we get encouraged, we feel motivated, we get scared, we feel hopeful, we feel like quitting. But, we are emotional beings and even the most disciplined among us still have emotions and are affected by them.Ĭomputers use logic 100% of the time. If we DID what we knew we SHOULD do 100% of the time, using the mathematical approach would be best. This process continues until all the debts are paid off.” But, let’s look it at from another angle: Using the debt avalanche method, once the debt with the highest interest rate is completely paid off, the extra repayment funds go toward the next highest interest-bearing debt. “A method of repaying debts in which a debtor allots enough money to make the minimum payment on each debt, then devotes any remaining debt-repayment funds to repaying the debt with the highest interest rate. That my friend, is the Debt Avalanche approach. Paying your credits cards off starting with the highest interest rate to the lowest is “mathematically” the best idea. If you are like most logical people out there (like me □ ) you are probably saying, “you could save more money by paying the highest interest rate cards off first.” You are right – calculators do not lie and they will give you the correct logical answer. Watch this for an example of how the debt snowball works: Since you are taking the amount you used to pay off the first debt and putting it all + the minimum payment that you were already paying to the second together, you are making more of an impact towards that debt.Įach time you pay off a debt, the snowball gets larger and more powerful – which is great, because it just increases the speed that each debt gets paid off. What you will find is that each time you pay off a debt, the “snowball” gets larger.
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