When it comes to paying off debt, if you don’t have a plan, you are going to be sunk from the beginning.  There are lots of options out there for how you should go about paying off your debt. How do you know what to pay off first?

Should you pay off debt based on the biggest total amount?  

The highest interest rate?

The highest monthly payment?

Which one makes the most sense and will actually set you up for success?

To determine what debt you should be paying first, you need to understand what sets people up to be successful with debt payoff.

In those success stories of debt payoff, there are few things going on that help people really conquer their debt quickly.  Aside from the budget, these people have determination, they carry forward momentum and they feel encouraged throughout the process.

How can you feel the same way to kick your debt’s butt?

Use the debt snowball method.

What Debt You Should Be Paying First:

When you use the debt snowball method, you are paying off the smallest debt first.  You do not pay attention to payment amounts or interest rates. The smallest debt you have is what gets paid first.  No questions.

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What happens to your mind when you pay the smallest debt first?

This is the magic, and this is why you should be paying off debt using the debt snowball method.  When you look at your smallest debt, it will seem doable. Then you get it paid off faster than you thought you could and you immediately feel like a debt payoff rockstar!

Starting with your smallest debt gives you a quick win, builds up your confidence and encourages you to keep going.

It’s amazing!!  Your brain is immediately like, “I can do this.  I am going to crush this. Let’s keep going, but with even more intensity!”

What happens to your finances when you pay the smallest debt first?

This part is fantastic and is also why it is called the debt snowball method.  After you pay off that first small debt, you get to take what you were using as a payment for that loan and add it to the next smallest debt’s payment.  

This is how you build your snowball to become bigger and bigger to just knock out your debts as fast as possible.  As you pay off the next debt you can roll that payment into the next one and so on.

It’s freaking awesome!

You won’t feel like you are making big sacrifices to increase your payments, but it will still be happening.  This will help you get out of debt super fast.

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Your smallest loan is the debt you should be paying first.  Without a doubt. This will keep you pumped up about debt payoff when you get a quick win, you will feel encouraged to move even faster and your financial snowball will grow and grow until you are debt free.

This is the best way to pay off your debt.  Start with the smallest debt and roll it from there!

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