Dave Ramsey shares the secret formula on how to get out of debt as quickly as possible

There’s no way to sugarcoat that millions of Americans carry heavy debt. Whether it’s credit card debt, school loans, or personal loans, debt is a very real thing that can be detrimental to our emotional and financial well-being. 

When it comes to figuring out the best strategy to handle debt, there is no shortage of sources you can listen to. Among these voices are popular figures like Dave Ramsey, who are especially passionate about helping others figure out how to get themselves out of debt. 

In a video posted to his YouTube page, Dave offers some basic but impactful advice on the best mindset to adopt to start digging yourself out of debt. 

The Formula For Debt

If there is one thing Dave Ramsey is known for, it’s his no-filter language that tells someone exactly what they need to hear. In this case, Dave says, “the more passionate you are about becoming debt free…the deeper you sacrifice…the faster you get out.” 

This is a pretty simple approach to getting out of debt, but Dave hits the nail on the head when he says you will have to make sacrifices. Whether this means eating out or shopping less, skipping a vacation, or picking up a second job, there are ways people who really want to see their debt total drop can do this.

To Dave’s point, the people who are most likely to get out of debt the fastest will be willing to make the most sacrifices in their lives. If all you do is eat out one less time a week, the likelihood is that this won’t be enough money to really pay down a four, five, or six-figure debt. 

Debt Snowball

If you’re willing to make the sacrifices Dave believes people can make, he might suggest the debt snowball method. This popular strategy has worked for millions of people and is likely to work for you.

The method is actually pretty simple, and it starts with focusing on paying off the smallest balance you have first. The key point is that any extra money you have available every month will go to the smallest debt. Once the smallest debt is paid off, you’ll take the entirety of the payment you used for the smallest debt and transfer it to the next smallest debt.

As you pay down every debt you have, the amount of money you pay toward these debts “snowballs” as the debts get larger. It’s important to remember that this method doesn’t mean you will stop paying the minimum balances on your larger debts, but it does focus on the smallest balance first. 

The Avalanche Method

Another popular strategy that will still require the same level of passion and sacrifice as Dave describes is the avalanche method. Unlike the snowball method, which focuses on balance size, the avalanche approach is based on interest rates.

This means you will prioritize your debt repayments by taking care of any balance, credit card, or other debt with the highest interest rate. Once this rate is paid off, you’ll start with the next highest and so on down the line of debts until you are debt-free.

Taking care of the highest-interest debts first will save money over time. One caveat with the avalanche method is that if the highest interest rate and debt balance are the same, you might need a little extra time to pay all of these off, but that’s okay because it will still save you money in the long run. 

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