How to Pay Off Debt with the Snowball Method

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How to Pay Off Debt with the Snowball Method

In my first article about paying off debts, we discussed how to pay off debt using the avalanche method. Now we will discuss how to pay off debt with the snowball method. This method is just as popular and you will see why.

Snowball Method

The debt snowball method is a strategy where you pay off debts in order of smallest to largest amount. The idea behind the strategy is to gain momentum as you knock out each debt balance which helps build motivation for debt repayment. When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance. In essence, once you close out that first balance, you’ll “snowball” the amount you were paying into the payment of the next debt.

The Step by Step Guide:

Step 1: Make the minimum payment on all of your accounts. Never go dink on an account to pay another. Know what kind of debt you have – secured or unsecured.

Step 2: List your debts from smallest to largest regardless of interest rate.

Step 3: Put as much extra money as possible toward the account with the lowest amount.

Step 4: Once the debt with the lowest amount is paid off, start paying as much as you can on the account with the next lowest debt amount.

Step 5: Repeat this process until all your debts are paid.

Every time you pay off an account, you free up more money to put towards the next debt. Since you’re tackling your debts in order of lowest total amount, you’ll see debts paid off quicker.

Pros and Cons

As with any method or idea, there are pros and cons. The methodology behind this strategy is the motivation gained by paying off debts fast, not necessarily the cost savings. If you start paying on the largest debt first, you won’t get rid of it for a while. You’ll see numbers going down on the balance, but pretty soon you’ll throw in the towel and stop paying extra.

If you have multiple accounts in debt, it feels daunting, like you will never pay it all off! However, by using the snowball method and seeing your accounts cleared of debt, no matter how small. It gives you that extra boost and motivation to keep pushing on to tackle the next debt.

One of the cons is the cost savings. In most cases, you’ll have some of the highest interest rate debts at the bottom or middle of the list. Therefore, you’ll be paying extra in interest each month until they finally reach the top of the list.

“The math seems to lean more toward paying the highest interest debts first. But what I have learned is that personal finance is 20% head knowledge and 80% behavior. You need some quick wins in order to stay pumped enough to get out of debt completely.” – Dave Ramsey


In this article, we discussed how to pay off debt with the snowball method. This method is motivation driven and could be the right strategy for you. I know it can feel overwhelming when it seems like everywhere you turn you owe more money. However, using the snowball method you start to clear those little debts away very quickly.

Remember, there are many methods for paying off debt and all of them should be considered. If you need help tackling your debt, call a fiduciary fee-only financial planner/advisor. They will have your best interests in mind and can coach you through the process.

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