Putting Money Towards the Smallest Debt First
Mini-update on my debt strategy: I’ve gotten back on track since adding to my debt in August 2011 (I’m back down below $37K), but I have finally decided to do the complete debt snowball approach. My smallest debt is $2,100. I have not been focused on it at all since it is a 0% interest loan. However, having 5 debts means a lot of payments, and having 4 payments each month woud seem a lot easier, and I could be making a larger payment to my other 4 loans, all of which do have interest being charged on them. It feels very counter-intuitive to pay my smallest debt with no interest first, but I am going to try the Dave Ramsey way, since that was what got me started on really paying off my debt in the first place. If I work hard, I should be able to pay this account off in less than 2 months. I’ll update where I am on this particular loan as well as my overall debt at the end of the month!
So what’s your approach? Are you paying the higher balances or the lower balances first?