What does the debt snowball method focus on?

The debt snowball method specifically emphasizes paying off the smallest debts first in order to gain a sense of achievement and momentum. This approach encourages individuals to focus on one debt at a time, starting with the smallest balance, regardless of the interest rate associated with the debts. By initially paying off smaller debts, borrowers experience quick wins, which can motivate them to continue tackling larger debts.

This psychological boost is crucial because it helps individuals maintain their motivation and discipline in managing their overall debt. The sense of accomplishment from eliminating smaller debts can provide the encouragement needed to tackle more significant debt challenges.

In contrast, the other options highlight different strategies for managing debt, such as focusing on larger debts or consolidating multiple loans, which do not align with the fundamental principles of the debt snowball method. The focus on small debts is what differentiates this method and contributes to its effectiveness for many people attempting to manage and reduce their debt load.