Start Small to Speed Up Debt Reduction

You’ve seen those ads on the internet: the ones that claim “one weird trick” will solve your woes, be they about your body shape, your relationship, or your pocketbook, in no time flat. Well, frankly, it’s hard to believe that there’s a silver bullet that will immediately solve any of these problems. It is said that “a journey of a thousand miles starts with a single step”, and this aphorism applies incredibly well to the process of improving your financial health. At some point, you will realize that enough is enough: something needs to change. Today. It doesn’t have to be a monolithic, earth-moving alteration in the way you think about money, but once you shift your frame of mind and make that first change that will light the fire of your plan to reduce debt and work toward savings, the effects will compound before you know it. No weird trick required.


In personal finance circles, this idea is often called the “snowball method.” It’s based on a behavioural pattern in which people often find it easier to tackle small challenges first, and move on to the bigger ones. Only, in this case, paying off your smallest debts first and working your way up has been proven to accelerate the overall time to zero debt by a significant margin. In the case of debt, time is always on our minds: interest, being a time-dependent force, seems to always be nipping at our heels. By focusing on one item at a time and paying off the smaller debts first, while meeting the minimum payments on others to keep penalties from accruing, you will get faster access to extra assets that can be portioned out between day-to-day needs and forwarding on to the next-biggest piece of debt. As each smaller debt is repaid in full, the monthly money used to pay that debt is then applied toward making additional payments on the next-smallest debt, and so on until all debts are repaid.

There is, admittedly, some debate as to whether it’s better for consumers to focus on zapping high-interest debt first instead of creating a snowball. Both methods work, but they appeal to different personality types. If you’re looking for an ongoing source of motivation and want to see your efforts growing and becoming more meaningful over time, starting the journey toward financial health with a small step may work well for you.