Am I Bad at Math Too? Why Paying Off Debt is About More Than Numbers

By Jackie Beck   Updated 05/19/2021 at 5:16 pm

It’s been said that “Dave Ramsey is Bad at Math” — tongue in cheek, I imagine, for the sake of an attention-getting headline. Just yesterday though, a commenter on my post that explains how the debt snowball method works suggested that I learn some math.

I thought John brought up some great points, so wanted to respond in more detail, since others might be thinking something similar. 

Here’s John’s comment:

This is really bad advice.

It is a very basic mathematical exercise to show that the debt snowball method results in you paying a lot more in interest fees than you would pay if you put your attention on highest interest rate debts first. The argument here is that it is a psychological benefit. Well, sorry but I think paying off all debt much sooner is a much stronger psychological benefit than snake-oil repayment methods that take much longer for people to complete because they end up accruing much more interest. Once again, this is very basic mathematics and I suggest the author of this page learns some.

And a part of my response:

…note that I said “To use the debt snowball method, you usually start out by organizing your debts from the lowest balance to the highest balance.” (Emphasis added.) The key point to the snowball is that you chuck as much as possible toward the first debt in your list, while making minimum payments on the rest. That debt can be any debt. Judging from Dave Ramsey’s track record though, I’d say more people are motivated by quick progress — which happens when you put the smallest debt first. Not that many people are likely to stick with things they don’t see progress on.

Diving deeper

Let’s go back to John’s comment.   He starts out by saying that “It is a very basic mathematical exercise to show that the debt snowball method results in you paying a lot more in interest fees than you would pay if you put your attention on highest interest rate debts first.”

Since I have my handy debt snowball app (with correct math, btw) it’s easy to tell just how much faster you get out of debt with each variation of the debt snowball (lowest balance first, highest interest rate first, or debts in a custom order). 

I’ve looked at the lists of debts that other people have sent me, and I can tell you that the savings (time and/or money) for each order varies. Sometimes it’s a few months, or a few hundred dollars. Once I even saw no difference. If someone had two debts of equal amounts, but one with an enormously high interest rate  and one at 0% interest, it’d be a large difference.

Why all the variation? Because everyone’s list of debts is different. Different interest rates, different minimum payments, different extra amounts that they can chunk toward debt, etc.

A critical point

But I’ll tell you one thing that’s true in all cases: if you stick with it and have multiple debts, you will always get out of debt faster using the debt snowball method than you would without it. 

That’s due to one simple mathematical fact: when you use any variation of the debt snowball method, you put more money toward debt. When you don’t use it, you spend the money you’d freed up on something else instead.

There are reasons why one variation of a debt snowball might work better for you than another, but they all come down to motivation and psychology. I’ll explore those in another post. The main thing though is to do what works for you.

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9 thoughts on “Am I Bad at Math Too? Why Paying Off Debt is About More Than Numbers

  1. I too used the debt snowball although I wasn’t familiar with the term and had heard of the concept before Dave Ramsey came along.

    I found the psychological boost of paying that first (lowest amount) debt off exhilarating. That exhilaration did not diminish when I applied that amount to my next largest debt. I paid off all my unsecured debt in less than 2 years. That double boost of paying off a debt in full followed by making that big payment to the next debt the following month was almost addictive.

    I can’t argue with John’s math. I also can’t argue with how inspired, motivated, and in control I felt each and every month by knowing my own psychology and ignoring the math.

  2. Dave Ramsey is just as much about personal motivation as he is about getting out of debt. The reason most people stay in debt isn’t because they can’t do the math. It’s because they don’t have the motivation. Dave’s debt snowball is designed to keep you motivated.

  3. It is huge mental boost to see how you eliminate debt one by one. Snowball method works and workd just fine. Personal motivation is a huge factor here.

  4. Personally, again personally I would go for highest interest first had I been in debt. My motivation is how less I have to spend at the end. I see your and Dave’s point though and have come to re enforcing conclusion that personal finance is in deed personal

  5. Part of the method is psychological – getting out of debt makes you feel better! Put some math on that!

  6. Thanks for all the feedback guys :)

    I know many people are very motivated by the lowest balance method. It feels great to cross debts off the list, and getting that feeling quickly can be great.

    I actually hadn’t even heard of the debt snowball method myself until we were already down to just the house, but I suspect that if I had, I’d have wanted to put my snowball in the order of highest interest rate first. I hate paying interest, so it would have bugged me. But, too bad I didn’t discover that hatred before I agreed to pay extra to borrow money.

    Of course I can’t say for sure, but putting the highest interest debt first in my snowball probably would have worked for me — but only because it takes a LOT to discourage me, and I’m extraordinarily motivated by even the smallest amount of progress. That’s not very normal :p

  7. As one who is struggling to start the snowball I think I like the snowball best. I took my 2 smallest cards out of the equation and started up the ladder a little bit. I like the idea that I will get more motivated once the first one is paid off. That being said I did have one crazy card with a ridiculous interest rate of 30% and got that paid off before I got divorced. It’s not necessarily all about the math.

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