When to use it
Use it when motivation is the main barrier to paying off several debts.
How to apply it
- List all your debts from smallest to largest balance.
- Keep paying the minimum on every debt.
- Put any extra money towards the smallest debt.
- When it is cleared, add its payment to the next smallest debt.
- Repeat until all debts are paid.
Tip: This approach can cost more in interest than the avalanche method; weigh motivation against cost.