The Hell With You Dave Ramsey! I’m Paying My Highest Interest Debt First!

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The Hell With You Dave Ramsey! I’m Paying My Highest Interest Debt First!

Posted by TheFinancialBlogger 1050 days ago, popular 1049 days ago (http://www.thecredittoolbox.com)
Category: Personal Finance | Tags: dave ramsey pay off debts

What am I thinking; attacking of the most popular personal finance guru; Dave Ramsey? Who am I to critic his way to pay off debts? Well, I’m simply a guy that don’t think the same way.

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franklin 1049 days ago

Answer to the first paragraph: To get more page hits for your blog.

valencio 1049 days ago

I have been using DesktopBudget.com to manage my personal finances for a few months now. Its the easiest to use free, offline personal finance manager I have seen so far.

nbk75dq 1048 days ago

I’ve seen this topic come up before. Most people advocate paying off your debts, but then disagree about the payoff order. Should you first pay off the debt with the highest interest rate, or the one with the lowest balance?

I agree with Ramsey, because paying the lowest balances first taps into psychology and motivation.

Sure, those of us who already have good financial habits could save an extra $100 by paying the higher interest rates first.

But the people that Ramsey is trying to help, who are trying to break the spending/debt trap, would lose more if they did not stick with paying off the debt.

Focusing on the lowest debt first increases their chances of success, because it generates the instant gratification they need to build confidence and feel motivated to spend less, and make paying off their debt a habit.

Also, I think that in the real world, our lower balanced debts tend to be the ones at the higher interest rates.

For example, the spectrum of pay day loans - credit cards - car loans - mortgages tend to go from the highest rates to the lowest, because their is more collateral and less risk as you climb the spectrum.

But, that same spectrum also runs from lowest to highest balance.

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