The desire to be debt free is smart; but I think the purpose of a large group is motivation and peer pressure. Getting out of debt faster isn't going to work mathmatically. (I can't reason a scenario where the group's collective power doesn't favor one individual in the group over another.)
How It Can Be Successful (a.k.a unrealistic expectations)
All of the following conditions must be met:
- Nobody in the family is greedy (at all)
- Nobody in the family will complain once about paying another bill. (not once)
- Nobody in the family has any goal other than "TOTAL FAMILY INDEBTEDNESS REMOVAL"
- Nobody in the family will miss the cash they are going to lose
- Nobody in the family will complain about the inequity, but they very well know it is inequitable and by exactly how much
- Nobody in the family is a typical person (imo)
- Everybody agrees to the order of the bills before you begin
- Nobody has any desire to change the order of the bills being paid
- Nobody can add bills after you begin
- Everybody has to change their spending habits to change whatever got them into debt in the first place.
- Everybody has to stick it out until the end, even as they continue to lose money
- Nobody does the math half way in and figures out they are the least in debt and therefore and paying the most in without being compensated in any way
- Nobody flakes on a single payment (which would cause resentment)
- Nobody uses the credit being paid off in any way (which would cause resentment)
- Nobody loses their job
If any single thing fails, or if anybody changes their mind about how they feel about paying another person's debt, this plan will breakdown quickly and get very ugly. Please notice most of those items are emotions, which cannot be planned nor controlled.
Bottom line: Don't do it. The risks are too high compared to the average reward. If your family could pull it off, a better plan would be to sell a reality show about the magical family who never fights and always puts the good of the others before themselves.
A Better More Realistic Plan
Everybody do a debt snowball individually but have an email group, weekly group call, regular family meeting, group chat session or dinner event where you encourage each other, talk about the success, failures and openly discuss everybody's situation. This is called a support group and they can be more effective than doing it on your own.
Everybody meet and decide a plan of action
- Everybody creates a budget
- Everybody creates a plan of the debt to pay off
Go around the table and
- Give a status update. How far along did you make it on your plan
- Talk about the successes in paying off debt
- Talk about the problems encountered
- Get positive affirmation and suggestions from the group on how to solve those problems
- Share ways to save money so the group is more effective
This will require humility, patience and grace from the participating family. It will rely on similar peer pressure to succeed as a single group, without all of the very real pitfalls and very real consequences of a individual failing in a big group.