The highest-interest-first method is only “mathematically superior” if your primary goal is to get out of debt as quickly as possible with a minimum of interest paid.

But if your primary goal is to free up cash-flow as fast as possible (i.e., to reduce that minimum payment–$1100 in Trent’s example), and it’s worth it for you to give up some time and interest in support of that goal, then the snowball method actually has the mathematical advantage.

And that goal is perfectly valid, if you ask me. It’s great to have that freedom of not “having” to pay a particular debt’s required minimum. Even though you’re using that extra money to pay off the remaining debts, you’re nonetheless free to divert it towards emergencies if they arise, or to not pay it at all if you run into income trouble (disability, layoff, salary reduction, etc.) Well worth the often small trade-off, IMHO.

JJ

]]>I bought the software in October, and looking at the effect of a larger snowball has really motivated me to increase my additional payment amount.

There are also free calculators at the Bank Rate and other sites, but you would have to look at each debt and payment scenario separately.

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