The debt snowball method entails making only the minimum payments on however many debts a person has except for the smallest: with this debt, the method would hold that someone needs to devote as much money past the minimum payment as possible every month to annihilating this particular amount owed. Once it is gone, the money that would have been assigned to the previously lowest debt is now thrown at the new lowest debt, the amount growing (other circumstances aside) until the highest debt can be addressed all by itself. The snowball method is not inherently the fastest way to get out of debt, no matter what Dave Ramsey and his employees like George Kamel might say. His philosophy of debt reduction, really, is only beneficial for idiots, so that they at least make some consistent progress despite their stupidity, or for reassuring the very impulsive spender and debtor that there is a plan they can follow.
The debt snowball Ramsey and his team love to endorse is objectively not the best way to tackle multiple debts of diverse sizes and interest rates. Logical necessities about interest on principal and the potential disparity between debt sizes alone establish this. Taking care of a $1,500 debt with 1% interest, to give a random hypothetical example, before putting any resources beyond making minimum payments towards eliminating a $50,000 debt with even just 2% interest, compounding or not, will ultimately cost far more money long-term. Since the principal and the interest rate are both higher in the latter case, one would not even need to calculate the exact monthly/annual ramifications of this for each debt to realize these things. When there is a small debt or a host of relatively minor debts along with a significantly greater one, focusing on the largest principal with the largest interest rate is still better for minimizing the time and expenditure of money involved in liberating oneself.
The real benefit of the snowball method, as the Ramsey team might admit, is situational to a person's subjective, individualistic psychological motivation. Perhaps a person ridding himself or herself of various small debts first, no matter the interest rates or difference in principal between the smallest and largest debts, provides them with a satisfaction or relief that helps them stay personally committed to actually escaping debt across months and years. This benefit is possible. However, this method can still take far longer and result in a great deal of money unnecessarily spent as high principal, high interest debts are allowed to grow almost entirely untouched, compounding at much more crippling rates. The real problem would be in a person's lack of discipline rather than the opposite sort of debt elimination system.
A philosophy of debt reduction strategy is not false just because an individual or many individuals lack the self-control, a totally avoidable thing on their part since actions can be controlled even if desires cannot be, to carry it out consistently or at all. The snowball method is popular because it can provide quicker elimination of the total number of individual debts, but the individual debts paid off might be much less troublesome in the present and in the future than the ones that have to be ignored to varying extents in order for the snowball approach to be utilized. Dave Ramsey, as accurate as his advice or that of his cohorts can sometimes be, is reliant on holding to ideas that are at most only applicable in specific situations for specific people and thus are immediately fallacious outside of those contexts, including the snowball debt approach.
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