Dave Ramsey , personal finance guru knows it better about
Debts than most of us all…Dave has personally helped thousands of people come out of the financial abyss, through
his Books, Seminars, TV shows and Radio talks
One of his controversial technique is the “debt snowball plan”…a
plan to get people out of the debt. The traditional and common-sense approach to
debt elimination is ….if you are faced with a mountain of debts , rank
them in priority of the interest rates or the quantum of loans… and then proceed
to close them off in that order from the Top. This is the analytically unquestionable way to resolve debts. The problem though is ..it works only
on paper…When the rubber hits the road , most people fall by wayside to the
common-sense approach of getting rid of debts..why? If you do it by the "biggest debt first" approach, it
gets way too long to see the debt cleared…and Oh Boy..Man cannot wait for that….Don’t get
me wrong…Man is anything but rational because Common sense is anything but
common….
Dave Ramsey calls debt clearance as 20% head knowledge and 80% behavior!…so he lays
the following debt clearance plan out: “List your debts in order with the smallest payoff or
balance first. Do not be concerned with interest rates or terms unless two
debts have similar payoffs, then list the higher interest rate debt first. The
principle is to stop everything except minimum payments and focus on one thing
at a time..Paying the little debts off
first gives you quick feedback, and you are more likely to stay with the plan.”
According to Ramsey, “You need quick wins to stay pumped up
enough…When you start knocking off those easy debts , you will start to see
results and you will start to win in debt reduction” .
So
do you understand the trick that is at play here? …Anytime you think of a change to be done, be it your physical
exercise routine or a new diet routine or learning a new language :
1)
Start Small & Gain a quick win
2)
Increment small
3)
Stay in the game without a break to above two
routines
You are going to see through the Change ! You are going to sail
through it without Pain!
Trick is to trick the brain…with quick wins to stay
long enough in the game!