Of course the Dave Ramsey method isn’t for everyone, and Bankers don’t dare endorse it while acting in their professional capacity. However, when I leave the office and drive home, the first thoughts in my mind are about how fast I can pay off the debts I have, and how I will never turn to credit products for anything in the future ,including a home purchase. The stress of a 15/30 year mortgage and the many caveats/catches/insurances/interest charges/loan servicing problems that plague my customers is worth avoiding in full if it means renting inexpensively for an additional 2-3 years.

Before wholeheartedly endorsing the Debt Snowball Method, it is important to consider unique situations with which some people are faced when evaluating this technique. For example, some debts come to term sooner than others and it may not be as practical to make a lump payment only a few periods before the debt is paid.

Also, some debts, such as settlement options, have a required “pay by” date and must be prioritized to avoid certain penalties. For example, I owed $10,000 to my grad school after leaving mid-semester to pursue a career in banking (the degree was in Psychology, and the $10,000 was the student aid refund). They wanted it back, but were willing to settle for $5,000 if I’m paid-up by the end of August, 2011. If it’s not, the debt reverts to $10,000. Obviously this situation makes this debt a priority, even though it is my highest one.

I will agree with the author of this article that $1,000 is not enough for most people to cover expenses in the event of a major emergency. I do, however, think that the $1,000 is psychologically motivating to produce well and maintain a job. It puts you in an uncomfortable position to clear out debts, keep your nose clean, and actively seek financial stability.

i think the one different between dave ramsey and the others is he talks about motivation …. get angry … get rid of debt … never take on debt again. your credit is only as good as your job stability … and we have no job stability in this country anymore.

for myself, i got laid off. filed bankruptcy … all we have left are student loans. both our cars and our motorcycle are paid for. in a nutshell, i’ll go work that second job and get completely debt free, 1 year buffer on all bills including our chest freezer full of food, and start enjoying life.

my suggestion, motivation and follow thru are more important than all the anal banker math. yeah, according to some banker, paying off your most costly debt i.e. the mortgage is financially wise; however, most people don’t have that level of discipline.

summary: mathematically, using principle reduction is the quickest way to debt free by eliminating your most costly financed item — the home. using the credit only for emergencies — and i do mean true emergencies — will get you debt free faster than what Dave has stated; however, in defense of him, the principle reduction method is logical where as some people like my wife are emotional. the snowball method is emotional based and she is gaining motivation as in a positive attitude and willingness to stay on track with his program as opposed to the math approach using principle reduction.

honestly, either way works. there are serious pro and cons to both methods … just figure how you are motivated … emotional or logically motivated.

for myself, buy the book and just put some elbow grease behind his his approach to the book before you say it doesn’t work.

However, both opinions are valid, and both opinions are acknowledged as viable ways to pay off debt. I think you’re making a mountain out of a molehill. But with respect to the claim that retirement should be maintained throughout the debt payoff period, some folks just might not be able to swing it. If it takes 2 years to pay off $100,000, the recommended approach of 15% retirement savings may not be achievable. Some folks on the brink of bankrupcy can barely pay their bills, let alone themselves.