Why Does it work?

The debt snowball method to pay off debt is focused on getting you in a habit. Managing debt has a lot to do with your responsible financial behavior. Following this approach modifies your behavior thus yielding positive results.

The second reason this approach has proven success is visible results and progression. If you start with a larger debt you will take longer to see any dent in the process. This can easily demotivate you and distract you from the process. On the other hand, if you tackle your smaller debts first you tick off your items of the list much sooner. This is a motivation for you to keep going and be committed to the process.

Thirdly, because you have eliminated a number of smaller debts on your accounts, you have also freed up a considerable amount of cash to pay off your larger debts. This makes your larger debt pay off faster too. The momentum you build with this approach is an inbuilt motivator to keep going.

Does this Approach Suit You?

Making an informed decision as to what debt strategy to use is up to you. You will compare your debt pay off options such as the debt avalanche method and debt snowball to your particular debts. In this process, you can speak with qualified credit counselors to get some advice. They will have a professional outlook and help you get to your target sooner.

You must choose the method that fits based on your disposable income. Just because one approach may look superior to the other on paper it may not suit your needs. It is better you choose a plan that works rather than one you abandoned along the way.  Making an objective choice is crucial. Considering your overall financial situation and your financial capability you can make an informed decision as to which debt pay-off method to follow.

If you are struggling to pay off debt, ACCC can help. Check out our debt management program today!