Quote:
Originally Posted by SnoopyCool
Dave talks about the emotional high of paying off a debt and moving on to the next one (on his website) as being the reason why you should pay smaller balances first. I believe he even refers to a study on this. I'm not sure I agree (I like paying on the highest balances more first), but I bet that works for a lot of people!
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I agree with you. I regularly catch Ramsey's tv show on XM radio as I am driving (long haul truck driver). Dave admits that paying off smallest debt first is not right mathematically (he says this in his audio book "Total Money Makeover"). However, he admits that if we were great at math and finance, then we would not be in debt. The idea is just as you said, when you pay off a small debt or two then you will be psyched up to continue. However, with me, my 2 largest debts are my 2 highest interest rate (about 9% each) so if I continue at the plan of highest interest rate first, then I will not reduce my monthly expenses until about 2-3 years from now when I pay off those car loans and only then get to my smaller credit card debt. In that case chances are I will lose interest and not keep up the getting out of debt.
Nitemarecooper