Preet Banerjee's video: What s the best sequence to pay down multiple sources of debt

If you carry multiple sources of debt, there is an optimal way to prioritize your debt repayments in order to pay the least amount of interest. This is known as the "Avalanche" method. Other people prefer the "Snowball" method. But a new research paper studied what people actually do and it turns out we hardly even think about it and rely on a sub-optimal rule of thumb in which we simply "balance match". In other words, we tend to ignore the interest rates we are being charged and instead just match the payments in proportion to the balances owing. Link to my column talking about this in more detail: https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-how-to-get-the-snowball-rolling-on-your-credit-card-payments/ Link to the research paper: https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20180288 Link to the online calculator: https://unbury.me/ SUBSCRIBE FOR MORE VIDEOS LIKE THIS: http://www.youtube.com/user/preet182?sub_confirmation=1 MY BOOK TO LEARN ABOUT THE BASICS OF PERSONAL FINANCE: https://www.amazon.ca/gp/product/0143183516/ref=as_li_tf_tl?ie=UTF8&camp=15121&creative=330641&creativeASIN=0143183516&linkCode=as2&tag=whercom-20 FOLLOW ME ON TWITTER http://twitter.com/preetbanerjee WEBSITE: http://www.preetbanerjee.com