Debt Snowballs and Behavioral Momentum
Behavior Momentum is a term used in behavior analysis that refers to the strategy of starting with simple, easily achievable tasks or "easy wins" to build and maintain a steady pace toward achieving a desired behavior or reaching a more challenging goal. By initially reinforcing smaller, manageable behaviors, individuals gain confidence and motivation, making it easier to tackle more demanding tasks. This approach leverages the reinforcing power of early successes to create a cumulative effect, where the persistence and strength of the behavior increase over time, facilitating the achievement of long-term goals.
When it comes to paying off debt, the debt snowball method is a common strategy used that employs behavior momentum. With this strategy, the focus is on paying off your smallest debts first while making minimum payments on larger debts. As each smaller debt is paid off, you roll the amount you were paying on it into payments for the next smallest debt, gradually building momentum until all debts are eliminated.
The positive reinforcement from these "easy wins" increases the likelihood of continuing the debt repayment process, creating a cumulative effect that propels you toward tackling larger debts and ultimately becoming debt-free.
What does this look like in real life?
Let’s say you have five credit cards to pay off:
Chase: $500
Kohls: $350
Truist: $1400
Discover: $780
TJ Maxx: $140
In this situation, for the sake of ease, let’s say each credit card has a required minimum payment of $40, and you have $300 per month that you can put toward debt. Minimum payments for these five credit cards equal $200, which leaves an additional $100 for the snowball. The debt snowball starts with the smallest debt — TJ Maxx. In this example, putting $40 toward the minimum payment and the additional $100 with the snowball knocks out that TJ Maxx debt, and you’re already well on your way! Keep adding $100 at a time to the smallest debt until all your debt is gone.
Psychologically, this works the way momentum works. The ball gets rolling down the hill as you pay off each credit card. You start with the smallest bill because that’s the easiest and it gives you… yep… momentum to pay off the next biggest one. Before you know it, you’ve paid all your credit cards off thanks in no small part to the science of behavior momentum!
