There are several approaches to getting rid of debt, from the debt snowball method starting with small debts to paying the highest-interest debt first. Man vs Debt suggests another strategy, dubbed “The Debt Tsunami”, in which you pay debts according to their emotional impact.
Managing money isn’t always simply a maths problem, it’s largely psychological and emotional too. That’s why the debt snowball method works for many people (getting more confidence knocking out debt) and the more financially beneficial approach of paying highest interest first doesn’t work for everyone.
Paying debts according to emotional impact, however, might feel more freeing for you. One example Man vs Debt gives is if you have a $500 credit card, a $700 credit card, and a $1000 loan from your in-laws. Paying back the parents first could prevent tension in your relationship. Some debts are better than others.
It’s a flexible, motivating approach that you could combine with other strategies.
Debt Tsunami: The Ultimate Method to Pay Off Debt [Man vs Debt]