Dave Ramsey is America’s most famous money adviser when it comes to paying off debt, and the program he promotes like a Sunday morning televangelist is called the Debt Snowball.

The debt snowball method requires that you list every debt owed from smallest to largest.  During the plan you maintain minimum payments on all debts except the smallest.  The smallest debt you pay more than than the minimum amount due until it is paid in full.  Once the smallest debt is fully paid you move onto the next largest debt and devote all extra income to that debt until it is paid in full.  This process continues until all debts are paid in full.

The basic idea in this program is psychological.  Paying off the smallest debt is easy.  Scoring an easy win builds enthusiasm and momentum.  Seeing the list of debts shrink–even if they are small debts–gives a person a sense of accomplishment.  As each small debt gets paid more money is freed up to attack the next larger debt, thus building a “debt snowball” that gets bigger as each debt gets paid.

According to Dave Ramsey, getting out of debt is 80% emotional and 20% head knowledge. Mathematically it makes more sense to pay the highest interest rate debt first, but Ramsey believes that it is more important to get fired up and achieve a sense of momentum since the key factor to success is one’s emotional commitment.

If it were about math, you wouldn’t have credit card debt. It’s not about math. It’s about behavior modification.

In fact, studies now show that Dave Ramsey is correct.  The debt snowball method is more effective than programs that pay the highest interest rate accounts first.  The emotional factor is a key factor to getting out of debt.  Indeed, one does need to be “fired up” to get out of debt.

The problem, however, with Dave Ramsey’s snowball method is the requirement that one maintain minimum payments on all debts during the program.  Also, all accounts currently in default must be brought current before the snowball process can begin.  For many people trying to dig out of a pile of debts, that just is not possible.

The challenge is you.  You are the problem with your money.

So, what do you do if you cannot bring all accounts current and maintain minimal required payments? Well, get fired up!  Why, you need Gazelle intensity!  You know, like that Gazelle who is about to be eaten by a speedy Cheetah, you got to run with reckless abandon and fear to save your life.  Quick, reduce your monthly living expenses.  Sell the fancy car.  Sell the home and rent something cheap.  Increase income now!  Get a second job delivering pizzas and start selling all your stuff on Craigslist.  Get angry. You need to be a little bit crazy to get out of debt.  Gazelle intensity!  Run for your life!

Really, watch a Dave Ramsey video and you will see this man scream like a crazy person.  He really means this. To be fair, he effectively motivates people and gets many to start believing that they can solve their debt problem.  Believing you can fix a problem is half the solution.  So, part of this is old-fashion motivational talk. The problem is, not all debt problems exist because of lack of motivation.

The people I meet every day have already cut their expenses to the bone.  They do work part-time jobs and their living expenses are minimal.  Yes, I do meet folks who are their own worst enemy and who can eliminate their debt by reducing unnecessary spending.  But the vast majority of people I meet for debt counseling are not living beyond their means and they cannot make the minimum payments any longer. They have hit the wall.  That’s why they come to see me in the first place.  They are stuck.

Family and Health Considerations

Another thing to consider is whether you should be taking on extra jobs when your health, both physical and mental, are already suffering from too much stress.  Sometimes that extra job is doing more damage to your health in the long run, and that stress eventually leads to more health problems and more medical debt.  Also, is it a wise thing to leave your family for another 15 to 20 hours a week?  Who is watching the children when you are gone?  Does your spouse of children have emotional needs that outweigh your financial problems? There is always a trade-off. Is spending more time at work a really wise choice for your family?

I like much of what Dave Ramsey teaches. His message is positive and his method is basically sound. But it is not for everybody. The Dave Ramsey program works better for folks who are just being stupid by overspending than it does for those who simply lack steady income, health insurance and family support to meet their financial needs. By all means, consider the Dave Ramsey system first and take time to listen to his broadcasts or watch is videos. But if the problem is more than motivation and overspending, consider other options.