He posted recently about the feeling he had when he paid off his first debt. Conventional wisdom says you pay off your debts with the highest interest rate first, but he had something else in mind:
And that first debt I paid off? It wasn’t the mathematically optimal one. Instead, it was the one with the lowest balance (which wasn’t really all that low to begin with). I chose that debt because it was the one I knew I could reach and I was desperate to feel some kind of success. That taste of success was the fuel for the rest of it.
This wasn’t about math, it was about psychology. He needed a victory and he took one. It encouraged him to keep going and he got out of debt.
There is a lesson here about one’s relationship with money and debt. Thousands of financial planners have millions of rules that don’t mean diddly if we aren’t following them. Even painful adjustments can be gratifying if there is a short-term goal that can be achieved.
Considering the economy right now, a healthy relationship with frugality is not a bad idea at all.