From what I understand, there are two ways to optimize the climb out of debt: optimizing for financial efficiency and optimizing for motivation
Financial efficiency typically calls for paying off the debt with the highest interest first, followed by the next highest, so on and so forth. This minimizes the amount a user has to pay in the long term. However, some people have trouble following this kind of abstract strategy, staying motivated and continuing to pay off their debts.
Dave Ramsey's advice focuses on optimizing for motivation. Pay off the smallest debts first, get those easy wins before tackling the harder debts. In the long term, this might be more expensive for the individual, but for some it is a more effective technique for staying motivated and continuing to pay off their debt.
Ultimately, people should do whatever works for them. Either way is a valid path to becoming debt free
I agree. Ramsey's method motivates people. People who aren't motivated will likely take forever to pay their debts, or fail at it. Ramsey's method promotes some sacrifice now, and reaping benefits later. Delayed gratification...
Financial efficiency typically calls for paying off the debt with the highest interest first, followed by the next highest, so on and so forth. This minimizes the amount a user has to pay in the long term. However, some people have trouble following this kind of abstract strategy, staying motivated and continuing to pay off their debts.
Dave Ramsey's advice focuses on optimizing for motivation. Pay off the smallest debts first, get those easy wins before tackling the harder debts. In the long term, this might be more expensive for the individual, but for some it is a more effective technique for staying motivated and continuing to pay off their debt.
Ultimately, people should do whatever works for them. Either way is a valid path to becoming debt free