The world of personal finance is awash with conflicting methods on how to pay off debt. Some recommend paying off your smallest balance first, others say you should pay down high interest first. Still, others recommend debt consolidation loans to pay off debt. The truth is that there is no right or wrong way to pay off debt. There is only the method that works for you.

As the notable personal finance guru David Ramsey says, it takes 20% head knowledge and 80% behavior to pay off debt.  Whichever method or system that inspires you to keep paying off that debt is the best one of your.

Before embarking on your journey to pay off debt, consider the two main arguments:

Pay Off Debt with High Interest First

The voices that bid you to pay off debt with high interest first have a highly logical argument. The problem with debt – whether it’s credit card debt, mortgage loans, personal loans, student loans or business loans – is that the longer you take to pay it off, the more it will cost you in the end. This is doubly true for high interest debt. The only way to stop high interest debt from growing is to eliminate it.  So, if you pay off debt with high interest rates first, you effectively staunch the growing interest where it is accumulating the fastest. In theory, you’ll pay less in the long run.

Pay Off Debt with the Smallest Balance First

The fundamentals of the “pay off debt with high interest”  argument are sound. And if you are disciplined and organized, this method works very well. However, most of us are not. This is why others argue that you should pay off debt with the smallest balance first. The idea is that by eliminating a debt and closing the book on one of your accounts, you get a boost of confidence and encouragement. You  can measure your success and your progress, which gives you the reinforcement you need to stick to your plan. When you pay off debt with higher interest first, it can take months or years to get rid of a debt, and you might give up before then.

The “pay off debt with the smallest balance first” method, otherwise known as the debt snowball plan, can work for those who need a boost in the behavioral corner. Consider your debt like a multi-headed hydra. It can be difficult fighting the beast as a whole – but each head  you remove makes the monster all the more manageable. So, instead of focusing on the inconceivably large problem in its entirety, focus on its menacing parts first. For some, this is the best way to pay off debt.

These are by no means that only ways to pay off debt. Some people have other methods that are more or less complicated. Explore your options and try a few methods to find what resonates with you. The key to conquering debt is to find a plan and stick to it.