why you shouldn't use the snowball approach

Today we hit another milestone. My undergraduate student loans are officially GONE! We started out paying off our loans thinking we would use Dave Ramsey’s snowball approach. If you haven’t heard of this approach, it is certainly worth reading about it in his book, The Total Money Makeover. There are definitely reasons why you shouldn’t use the snowball approach.


Basically, the idea is that you should pay off your loans according to the size of the loan. You start by paying off the smaller loans first and then work up to the bigger ones until your debt is eliminated. Paying off the smallest loans first is supposed to give you a high such that you will be encouraged to keep paying off debt.

And its not  totally crazy. There is social psychology that backs this up. We as humans feel better about ourselves when we are in control of our finances. It gives us confidence, strength of mind, and happiness. The snowball approach certainly offers you the feeling of being in control over your finances.

It is not a bad approach if you have a problem with spending, and need those little highs to keep yourself motivated to pay off debt and to stop accruing more. But if spending is not really your problem and you have debt for other reasons (medical bills, student loans, that kind of thing) then it might not be the best option for you.

If we used the snowball approach as it stands, we would be paying more interest over the life of our loans. Paying more in interest is obviously not good. It means that it will take us even longer to pay off our loans. When you have six figures of debt, this is not inconsequential.

There is a better way.

We are going to target higher earning interest loans first, and then work our way to the lower interest loans. Our student loans have interest rates that vary from nearly 5% to nearly 8%. When you are talking about $600,000 in debt, those interest rates result in very different outcomes for their respective loans. (We’re talking like, thousands and thousands of dollars in difference).

If we were to take the snowball approach, we have several Grad Plus loans that would spiral out of control. I will use one for example. One is a Grad Plus loan that has a balance of $75,170 and a killer 7.9% interest rate. Meanwhile, we have one $8500 loan with an interest rate of 6.8% interest that is not accruing interest until December.

Why would we pay the $8500 loan off, while the higher balance loans with higher interest rates are rapidly accruing behind my back? It just doesn’t make financial sense (cents).

As such, we will pay off our highest accruing interest loans first and work down to the lowest accruing interest. It is easy to get sucked into pop culture debt pay off strategies. At the end of the day, we all have to use our own good common sense when it comes to our finances, no matter what the masses are telling us.

Anyway, without further adieu, here is our OCTOBER DEBT UPDATE:

why you shouldn't use the snowball approach

So there you have it. I really do get physically ill looking at our numbers. We are just trying to stay focused on what we can and celebrate the small victories– one of our loans is gone!

What approach are YOU using to pay off your student loans? Have you tried the snowball method? Did it work for you?



  1. I understand not going with the smallest loan, but instead the largest.

    What I can’r wrap my head around is the figure of $600,000.00 in student debt.

    Would you mind explaining how Y’all have/had $600,000.00 in school debt?

    I never had any, so I’m Naive to the concept.

    I’m a former High School and College Counselor, and I’ve never seen this amount of student debt before.

    I won’t to know more to help promote others not to where your shoes.

  2. Congrats on paying one off. I love your approach. Math>Psychology. How much faster will you have them all paid off using your optimized approach?

Leave a Reply