The size of your first chunk gets most of the attention, but the timing of the second one matters just as much. In Dynamic Banking, where your paycheck runs through a line of credit, a chunk means pulling a lump sum off the line of credit and putting it against a loan's principal, and your paychecks then pay the line of credit back down. I walked through a plan for an Oregon household in a Dynamic Banking case study from Oregon, and it shows both the trigger and the size change.

The household brought home $5,000 a month and spent $4,000, leaving $1,000 of cash flow. They owed about $340,000 in all. One credit card had a $7,000 balance at 18%, another had $5,000 at 14%, the car loan had $28,000 at 4%, and the mortgage had $300,000 at 4%. They had a $15,000 line of credit at 6.25%.

The first chunk was big: $12,000 from the line of credit to wipe out both credit cards in month one. Big was right here, because both cards charged far more than the line of credit. Moving $12,000 from 18% and 14% down to 6.25% cuts the interest on that money by more than half on the day you do it. It also ended $215 a month in card payments, so cash flow went from $1,000 to $1,215.

Then the paychecks went to work. Each month, the whole $5,000 paycheck landed on the line of credit and the bills came back out of it. The balance fell by about $1,215 a month, to $9,570 after month two, $8,355 after month three, and $4,710 after month six.

The next chunk is due once the balance falls below one month's take-home pay, which means what actually lands in your account after taxes. That was $5,000 in this case. That rule keeps your whole paycheck working. When the balance is bigger than your paycheck, every dollar of the paycheck lands on debt and cuts interest until it's spent. When the balance is smaller than your paycheck, part of the paycheck has no balance left to offset, and that part earns nothing. So in month seven, with the balance under $5,000, the next chunk went out.

But the size changed. With the cards gone, the next targets were the car and the mortgage, both at 4%, and the line of credit costs 6.25%. Now you're moving debt from a cheaper loan to a more expensive one, so you want the line of credit balance to spend as little time high as possible. The chunks dropped to $4,000, small enough for about three months of cash flow to clear each one. How fast should you pay a chunk back? covers the payback window.

The cards were gone in month one, after about $163 of interest between them. The car was paid off in month 24. The mortgage was paid off in month 141, about 11.75 years into a 30-year loan, saving about $131,900 in interest compared with the full 30-year schedule. The line of credit's own interest over those 141 months came to roughly $5,000 to $6,000, and less if the deposits and bills are timed well.

None of that took a raise. The household sent $1,215 a month at debt, then more as each payment disappeared, and the line of credit kept that money working every day. The same plan with a higher line of credit rate would call for even smaller chunks, so run it at your own rate. Run the numbers before your first chunk shows how.

To set your own trigger, look up your average take-home pay for one month. When your line of credit balance falls below that number, your next chunk is due. Make it bigger if the loan you're paying off charges more than your line of credit, and smaller if it charges less.