While the "avalanche" method (paying high interest first) is mathematically superior, Ramsey argues for the "snowball" because the emotional boost from closing small accounts keeps people from quitting.
Build a fully funded emergency fund once non-mortgage debt is gone. The Total Money Makeover
Start contributing to retirement accounts like 401(k)s and IRAs. While the "avalanche" method (paying high interest first)
Redirect all extra funds to eliminate the mortgage. The Total Money Makeover
Critics point out that ignoring interest rates in Step 2 or pausing retirement matches (Step 4) can lead to losing out on significant gains or paying more in interest.
Many users utilize the Total Money Makeover Workbook or printable Baby Steps Trackers to stay motivated. Critical Perspectives
The final stage where you live and give "like no one else". Core Philosophy & Tools