Except Kristy doesn't give an alternative method.  If this doesn't work for you, then don't use it, but the reason that it does work for most people is because its easy and you can see results faster.  

dm, there are plenty of alternative methods out there online.  All one has to do is search for "debt consolidation calculators".  Kristy should not have to spoon feed the information.  It is still not financially sound.  Paying off the lowest interest card at the expense of higher interest cards adds up to hundreds to thousands of dollars interest to the debt payoff depending on amount of total debt.  She wasn't arguing about seeing results faster or it being easier.  What is so hard about paying off a higher interest card as opposed as a lower interest card anyway?   Dave has his schtick and he is selling it to the people without critical thinking skillls and making millions hand over fist.

dm, I would argue Kristy's alternative is Suze Orman. I am familiar with Suze Orman, but not with her debt repayment methods (does she have one? On her shows she is constantly talking about FICO scores and improving FICO scores, which suggests her views on debt are rather conventional).

FWIW, Dave Ramsey is NOT a professional financial adviser (to the best of my knowledge). He presents a plan that works for many people BECAUSE of the psychological factor (seeing your debt disappear by tackling small stuff first).

Everyone should just decide what will work best for them. My husband & I tried the snowflaking method while trying to put money into savings at the same time (at one point we had about 6k which is now gone). We found it totally discouraging, never feeling like we accomplished anything, continuing to play the balance transfer game.

We  reasoned that we had nothing to lose by following Dave's advice (a caveat: Our highest interest rate is 13.99% on one account--hardly a high interest rate--with all others 5.99% or less). Honestly, it couldn't be any worse than what we were already doing.

So we tried it out and here's what happened:

1. We now have a "baby" emergency fund of 1000 and a budget that accounts for all predictable expenses (we're still getting the hang of the zero budgeting thing)

2. We no longer use our credit cards for anything, so we are not increasing that debt (that's why we have the emergency fund)

3. We paid off our car

4. We have paid off and closed 2 credit card accounts and will be finished with another by the end of June

5. To date we have paid off over 11k in debt

We started doing this in March 2008.

We expect to have our remaining credit card debt paid off by the end of this year. We expect to be completely debt-free (we have student loans) by 2010, if not sooner.

Finally, Dave does address the issue of paying off small balances first EVEN IF those small balances carry a lower interest rate: It is purely for the psychological boost, so that people feel as if they are actually achieving something. And the effect of that boost from my own experience cannot be overstated.

Wow almost there,

I think it's incredibly harsh to attack those who follow Dave's advice as lacking critical thinking skills. I suppose you know every person following his program?

Do you have a personal issue that you feel it's necessary to insult people just because what works for them wouldn't work for you?

Money and human emotion go hand in hand. Dave's advice takes that human emotion into account.  Human beings are not always rational with their money. If we were we wouldn't have so much consumer or national debt.

Chill out.

Live and let live, I was not being harsh.  Most U.S. citizens do not have critical thinking skills. Why do you think people that come from third world countries do well here so fast.  Most have the critical thinking skills that have been done away with in our society mostly because parents and the education system does not teach it anymore.  That is why we are such a consumer based society always selling things to one another.  Most react emotionally without doing the math in their heads and figuring out what the overall cost will be.  I have read Dave R's books and agree on most of what he says by his steps except paying off lower interest first vs higher interest.  For example.  I would be a fool to pay off a 2.99% interest for life CC vs paying off a 21% department store card, just to get the boost of paying off a card.  Just because I disagree with someone is not attacking.  I didn't know the term "critical thinking" till I took a course in college.  Volumes are written about this subject.  Most old timers called it common sense or horse sense.  Life is like that, people telling others to do things that are not in their best interests. Sorry, but I feel you are too thin skinned by taking offense. (Note I did not say you were thin skinned so that you may take umberage, but said I FELT you were thin skinned). Telling people that they lack critical thinking skills is not attacking/insulting. Just stating facts.  Being male, I lack nurtruring skills of a mother, and recognize that.  Perhaps we need to stop the pollitically correct ideas of speech as seeing attacks when none are there and resort to plain speaking. Dave is still making great money by sellling common sense. Good evening.

Hi there! Thanks for the mention!

Actually, I will be posting an alternative method which will lay out the process that I used to get out of debt. We are in the process of changing some things on the website, so once that's done, you can go back and review m method - which is really every other financial experts opinion anyway. I'm always open to comments.

I realize that some people like Ramsey and that's ok. I believe each person has to decide on their own what's best for them. My big issue - and we get really in-depth in the comments with this - is that as a financial expert, Ramsey shouldn't be teaching people methods that cost them more money. In addition, I don't think he should be suggesting that people stop contributing to their retirement accounts while working on getting out of debt when, as a nation, we already have a negative savings rate AND boomers are having to forego retirement because they don't have enough money. The longer people wait to contribute the less they have and I don't think it's asking too much to contribute small portions while working to pay off your debt, i.e $20 a month and 1% towards 401(k). This particular post did focus on more of the overall cost and the fact that it was meant to continue a person's need for instant gratification, which mind you, is the reason most people are in debt in the first place. However, there are several points of Ramsey's method with which I disagree.

Again, thanks for the mention and I'm happy to hear any feedback!

Full disclosure, I have never listened to Dave Ramsey, though I did fellow this particular method when paying off my debt, I was not aware that it was call the "Snowball Method".  I liked it because once I had one debt paid off, I could put that money toward another debt and so on.  It worked for me.  And I did this while putting money toward my emergency and life happens fund and contributing to my 401K.   People trying to get out of debt need to do what is best for them, not every situation is the same.  If the "Snowball Method" doesn't work for you, then use a different one, but to dismiss a method that obviously works for most is irresponsible.   I had to do what was best for my situation, which is what everyone should do.

When it comes to paying off debt using the "snowball" method, there are only 3 ways to do it - smallest balance, shortest payoff, and highest interest rate. Attacking the debt with the highest interest rate guarantees you will pay the least interest and pay off all the debts the soonest. Paying off the debt with the smallest balance is simplest because there are no calculations. Calculating the shortest payoff tells you which debts will be paid off the soonest.

These last two methods only give you a psychological boost when you see the debt "quickly" go away, but you will never beat the highest rate method.

Dave Ramsey advocates the smallest debt method because its a no-brainer. If his audience had financial savvy, they wouldn't be in the mess they are.

The psychology of the thing is the problem, not math.  People that have 80K in consumer debt need to change their habits, not the order in which they pay their credit cards.

I started Dave's plan last year, and me and my wife paid off 48K in debt.  We now own our vehicles / motorcycles outright, have 3 months of living expenses in the bank, and don't feel we are in a worse position than we were a year ago because I paid off the $250 Best Buy card that was at zero interest before the Harley.  

I used the 'snowball' method before I even heard of Dave Ramsey. I paid off 30K debt from a failed business  in 5 years and had 17K in cash savings plus never touched my 401k. I retired at 59 and now work for my old company as a consultant. At the time I was making less than 40k a year. I recommend Dave because most people either can't or won't take charge of their own finances and need a simple to follow path.