Talk:Debt snowball method

Business Stub‑class Low‑importance

	Business portal This article is within the scope of WikiProject Business, a collaborative effort to improve the coverage of business articles on Wikipedia. If you would like to participate, please visit the project page, where you can join the discussion and see a list of open tasks.BusinessWikipedia:WikiProject BusinessTemplate:WikiProject BusinessWikiProject Business
Stub	This article has been rated as Stub-class on Wikipedia's content assessment scale.
Low	This article has been rated as Low-importance on the project's importance scale.

Overview Section is redundant

The opening section already gives an overview, so there is no need for a separate "Overview" section. This is particularly true since the Overview section essentially paraphrases the abstract given in the opening paragraph.

Relevant Academic Research

The section below was added presumably by the study's author to this article under the heading "Relevant Academic Research". However, we don't include such sections as they would logically end up as a long list of related papers. As a result, I've removed the section to the talk page in hopes that various editors can parse it for inclusion within the body of the article (along with the relevant citation). I don't know if the cited journal is of any merit, but I'm happy to presume it is until someone can present evidence otherwise - my concern is simply one of article structure. Rklawton (talk) 14:46, 14 June 2011 (UTC)[reply]

"Decision-making research has revealed that the debt-snowball method is a very common approach to managing multiple debts, even when larger debts have larger interest rates.^[1] Amar, Ariely, Ayal, Cryder, and Rick (2011) observed this tendency in surveys of indebted consumers and in incentive-compatible laboratory experiments. Amar et al. (2011) found that restricting laboratory participants’ ability to completely pay off small debts actually helped them to reduce overall debt more quickly, by refocusing their attention on paying off high-interest debts. The natural tendency to pay off small debts first (which Amar et al. termed "debt account aversion") has been attributed to the appeal of achieving goals that are near completion and the tendency for multiple losses (e.g., debts) to be more distressing than a single loss of equivalent total value."

Reply: When assessing the potential benefits of the debt-snowball method, it is important for indebted consumers to hear not only from financial gurus operating largely on intuition, but also from academics who have conducted careful research into whether the method actually helps people get out of debt. The benefit of more informed decision-making seems to outweigh the cost of a potentially lengthy section on relevant academic research.

In the interest of full disclosure, I am an author of the research summarized here. It has been peer-reviewed and will be published in the Journal of Marketing Research, a premier journal by any objective measure (see, e.g., the Financial Times’ list of top business journals: http://en.wikipedia.org/wiki/Wikipedia:WikiProject_Academic_Journals/FT_Top_40). The Editor of the journal asked us to update this Wikipedia entry. — Preceding unsigned comment added by Scottianrick (talk • contribs) 19:12, 14 June 2011 (UTC)[reply]

Fundamentally incorrect

The "snowball debt-reduction method" is fundamentally different from what is described on this page. The real method (the differing views are discussed at [[1]]) is to first pay off debts with the highest interest rate, regardless of the total balance, while making minimum payments on other debts. Once the debt with the highest interest rate is paid, the debtor begins paying off the next-highest interest rate debt, and so on.

I have no interest in rewriting this entire article, but it must be noted that it is simply not correct.206.174.34.147 (talk) 20:28, 4 March 2013 (UTC)[reply]

Do you have anything to back up your assertion that that's the "real" method? --Taejo|대조 07:05, 9 August 2014 (UTC)[reply]

There are at least two ways to rank the priority of paying off debts. The specific phrase "the debt snowball" is very widely used to describe the "smallest balance first" method AS DISTINCT FROM the "highest interest first" method. This is heavily referenced in the article proper. A quick look at the top 30 Google results for "debt snowball" strongly supports this as well, as the vast majority either argue for snowball-method only, or compare/contrast it with the "highest interest first", which they call "debt avalanche". Of course this is controversial. It appears the link provided by '34.147 is arguing against snowball and toward avalanche, but is appropriating the snowball term to apply to both methods. It's hard to call it "flat wrong" when both terms are "fetch", i.e. made-up terms that a very small number of media personalities are trying to force into the vernacular. 174.62.112.176 (talk) 04:09, 13 January 2015 (UTC)[reply]

^ Moty Amar, Dan Ariely, Shahar Ayal, Cynthia Cryder, and Scott Rick (2011), "Winning the Battle but Losing the War: The Psychology of Debt Management," Journal of Marketing Research.

[1] Moty Amar, Dan Ariely, Shahar Ayal, Cynthia Cryder, and Scott Rick (2011), "Winning the Battle but Losing the War: The Psychology of Debt Management," Journal of Marketing Research.

[1]