Paying off small debts first may get you in the black quicker

http://www.eurekalert.org/pub_releases/2015-08/ama-pos081215.php

Public Release: 12-Aug-2015
Paying off small debts first may get you in the black quicker
American Marketing Association

In debt and don't know what to do? Conventional economic wisdom says to pay off high-interest loans first. Yet according to a new study in the Journal of Marketing Research, paying off your smallest debts first can provide the motivation you need to successfully pay off even the most burdensome debts.

"Winning what are known as 'small victories' by paying off small debts first can give consumers a real boost in eventually paying off all their debts," write the authors of the study, Alexander L. Brown (Texas A&M University) and Joanna N. Lahey (Texas A&M University). "The reason is that meeting a small goal provides the motivation to then meet a larger goal."

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