I’ve been on one or another debt snowballs for quite a while now, and they’ve been great for getting rid of debt. But now, I’m to that stage where there are nothing but BIG bills left to fight. And they’re starting to gain ground on the psychological battlefield. I’ve decided to change my plan of attack by trying something new.

There are more than a few opinions going around about what is the best way to pay off debt.

Psychology (or Mind over Money)

Those Dave Ramseyites (believing in the Dave Ramsey Debt Snowball method) are concerned with getting people to change their spending and money management habits by achieving ’small wins’ of paying off some bills right off. This appeals to those starting out with debt elimination, but isn’t the most efficient way to kill the bills. It concentrates on changing habits, at the expense of additional expense(s).

 Science (or What Makes Cents)

Once you run the numbers, the Highest Interest First snowball shows that money-wise, it’s the best for using your money to the fullest extent. However, the problem there is that once you get to the larger bills, it seemingly takes forever to pay off one. The psychological effects start to affect you;  "It’s taking too long." or "I don’t seem to be making very much headway." thoughts, start running through your head.

I’m There Now

This is the spot I find myself in now. I’m left with the ‘big’ bills (any bill that will take more than 6-8 months to pay off by itself), and it’s getting difficult to maintain the focus and pace. I’ve eliminated all the little bills already, and have switched long ago from the Dave Ramsey Debt Snowball to the Highest Interest First snowball. The problem now is keeping up the morale in these tough times.

When you see all the money go out and don’t have very much left over to do any living, it tends to cause disillusionment with the whole ‘get-out-of-debt’ process. Why suffer, scrimp, and save when you can spend now, and worry about it later. That seems to be the recurring theme with the American public in recent years;

Housing Bailout – Congress is passing a bill that will help bail out those people that decided to do the ARMed robbery of our mortgage system. Allowing them to stay in houses they clearly couldn’t afford, by guaranteeing them new loans with my tax money, and forcing the banks to write down the loans to more realistic levels. Reward for getting yourself into too much debt.

Bankruptcy Reforms – The new reforms addresses an issue where too many people were buying into the champagne and caviar lifestyle, and using bankruptcy as a ‘get out of jail free’ card. The huge push by the credit card companies and other banking/loan companies indicates to me that they were seeing too many bankruptcies. Another case of getting in debt and opting for the ‘easy-out’ solution.

I’m not saying that there aren’t deserving people in either of these programs, but the original impetus for these reform programs was caused by too many people living WAY beyond their means. My problem nowadays is that it seems like they’re getting rewarded for it!

Ok, Back to Earth

So when I look around and still see a stack of bills that suck out every penny of my paycheck each payday, it’s hard to keep the faith and carry on sometimes. Everyone else is living beyond their means without serious consequences (in many cases). Kids are young only once, and some things you can only do once in your life. Why not do them right and have a life.

Balance in debt repayment seems to be the name of the game for me nowadays. I have lots of incentive to get out of debt (blogging friends, the economy, retirement concerns, college savings, etc). but I’m starting to see just as many reasons to put off some of that repayment in favor of things that bring enjoyment to life. (Vacations, doing things with the family, fixing up the house, buying new appliances/clothes/stuff).

I know, a lot of you are already thinking, "Well, if you were already out of debt, this wouldn’t be a problem." True enough, but that’s not the case. Once I get out of debt it will be, but there’s a bit of time before that day comes.

New Focus – The ‘Laid Back Debt Elimination Snowball’

I’ve decided to come up with a new debt snowball method to try to integrate my desire to get out of debt, with my desire to live my life as fully as possible.

The Laid Back Debt Snowball goes like this.

Make two lists of all your bills you’re going to pay off. Order one list of all your bills by interest rate, biggest to smallest. Order the second list of ALL your bills, from smallest balance to largest.

Then, take the top entry from the Balance list, and add it to the top of another list.

Next, delete the entry selected in the balance list from the interest rate list, and take the top entry from the highest interest rate list and add it to the bottom of the combined list.

Continue alternating back and forth like this, until you are out of entries. When complete, you should have a list that gives you a combination of efficiency and emotional self-gratification. The efficiency, from killing the highest-interest bills, and the self-gratification from completely killing off a bill every so often.

It’s not a perfect system, but for those getting jaded by a just one-or-the-other approach, it might reinvigorate you to get rid of those bills.

I’m going to try this for a few months and see if it helps get me back to the ‘old debt-hater’ I used to be.

Do you have an alternate way to get rid of debt that you’d like to share? Leave us a comment and let us know!