My daily to-do list consists of things like “email wife hello,” “call home,” and “finish making this to-do list.” Is that really true? No. But I often write down very small tasks that might not take that much time, alongside some bigger undertakings (“finish blog post”). With any luck, I knock off many of the easy things first so that by 10AM, I’m left with two-thirds of my to-do list checked off, and only a few big tasks left. But does this process of small-then-large actually help me complete my bigger goal of having a productive day? I’ve always thought so, but then again, I haven’t run a controlled experiment.

One possibility is that by completing several small tasks, I give myself a sense of competence that I can do what I set out to do, or what psychologist Albert Bandura has termed “self-efficacy.” Another possibility, however, is that trying to pay attention to a number of smaller sub-tasks makes it harder for me to maintain my focus on the big picture (think: “Well, I just finished these three little things, so I may as well as check out what’s new and exciting on Facebook for three hours before writing this blog post”).

So, which path actually wins out? Some new research from marketing professors Blake McShane and David Gal has examined this very question in the context of debt management, with a straightforward approach. If small victories can help win the war, then we would expect that people who close individual accounts would have a higher likelihood of eventually eliminating their overall debt.

A brief primer in debt management is necessary before delving into Gal and McShane’s analysis. When people face large amounts of debt, they have a few different courses of potential action: they can pay off their debt slowly over time (if they have the means to do so and can make major lifestyle changes) or at the other extreme, declare bankruptcy. There are also some middle-of-the-road routes, one of them being debt settlement, which allows in-debt consumers to make monthly payments to a bank (which acts as a safe house for that money so that the consumer can’t get into more debt). After a period of time, a debt settlement firm then has access to this account and, through a series of negotiations with the consumer’s creditors, can use the money in it to lower the balance due on the consumer’s debts.

Here’s the interesting piece: based on a variety of factors, the debt settlement firm can choose to use the consumer’s money to close off a few smaller accounts, or one larger account. By way of example, imagine that Tom and Adam are both $10,000 in debt, and they both have one account with $6,000 debt, one account with $2,000 debt, and two accounts with $1,000 debt. Let’s say that they’re really similar guys, and they’ve each managed to contribute $2,000 to their bank account over the span of a year. So, they have the same exact amount of debt, the same number of total accounts, and the same amount of money that can be used to pay off debt. They also have the same overall goal: paying down all of their debt. The debt settlement firm may decide to close two of Adam’s accounts (two of the ones with $1,000 debt), but only close one of Tom’s accounts (the one with $2,000 in debt). Although they each now have a total debt of $8,000, Adam only has two accounts that are still open, while Tom has three. Another way of looking at this is that Adam has completed a few smaller tasks on the path to his overall goal, whereas Tom has continued to focus on the big picture.

Going back to the original question, would Adam be more likely, in the end, to reach his goal of paying off all of his debt than Tom would? In the real world, of course, there aren’t people who are as well matched as Tom and Adam are. But through a series of sophisticated analyses on data from a giant debt settlement firm, Gal and McShane were able to analyze whether, keeping all else equal, people who had a higher fraction of their accounts closed after a year in debt settlement would go on to subsequently pay off all of their debt. And indeed, they did. Even when controlling for overall account balances, people who had a higher fraction of their accounts closed after one year were more likely to complete the debt settlement program. Now, on its own, the amount of debt that a consumer had paid off after a year was also predictive of whether they would eventually pay off all of their debt. But, when examined in concert, it was the fraction of accounts closed that really mattered. Small victories, at least in this case, did in fact win the war.

There is one danger to this process of playing small ball, though. Moty Amar and colleagues found that people intuitively wanted to close accounts with a small amount of debt first, but did so even when the larger accounts carried much higher interest rates. So, although tackling small debt may help people stay on path to realizing their end goal, they may pay slightly more money to do so in the long run.

Outside of debt management, Gal and McShane’s findings suggest that if you have a goal you want to accomplish, you may have a better chance of doing so if you break it into a series of smaller sub-tasks. Research still needs to be done, however, to determine the appropriate number of smaller tasks that should be created.

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