What is the debt snowball method and how does it work?

by J B

Want to get out of debt faster? The debt snow method is for you. This is a strategy through which you can pay off your debts in the order of smallest to largest, you gain momentum as you see knocking out every remaining balance. When you have paid one smallest debt, you can roll the minimum payment for the next smallest debt.

Isn’t it like making a snowball where you roll the snow all over your yard and as you gain momentum, the size of the snowball increases? The same is with the Debt Snow ball method.

How does the debt snowball method work?

You need to start from the baby steps. Let’s have a look:

  1. List down all your debts in increasing order regardless of interest.
  2. Make a minimum payment for all your debts but leave the smallest one.
  3. Pay the possible smallest on your smallest debt.
  4. Repeat the steps until each debt is paid.

The above-listed strategy will help you to stay motivated in the journey of paying off debts. When you will successfully pay your smallest debt, you will find yourself excited and motivated to pay the bigger ones too without losing your financial balance.

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Why does the Debt Snowball method work?

The debt snowball method changes your behavior. You don’t need a degree in mathematics or attend any business school for paying your debts. All you need is hope and motivation. Paying the debts to need 80% behavior and 20% knowledge. If you are ready to mend your behavior, no one can stop you.

Let’s talk about interest rates

If you start with paying off the big debts first, you will find the procedure very long, and eventually, you will stop paying it. But when you start with paying off your smallest debt first, you will see how quickly you get success. You will feel excited to pay off your next debts and motivated too. After some time you can see, you will be paying a good amount for your debts without disturbing your balance. When you find that your snowball is working, you will be interested in going on with it.  And soon you will be “Debt-free”.

Example of Debt Snowball method

Let’s understand it with a real-life example:

Say, you have multiple debts as,

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  1. $500 – Medicine bills – $50 payment
  2. $2500 Credit card bill – $63 payment
  3. $7000 vehicle loan- $ 135 payment
  4. $10,000 Education Loan – $96 Payment

Use the Debt snowball method here, Make minimum payments of each but leave the medical bill. Take up a side job to make $500 and add your snowball. This way, your debt will go easily in one month. Now you are free from medical bills, jump to the Credit card bills. Now You are capable of paying $613 ($550+$63), In the next 4 months or so, you will be saying goodbye to your second smallest debt also. Isn’t it exciting?

Now you will beat the car loan with $748 per month. Hardly 10 more months and you will be kicking off your car loan.

And similarly, in 12 months your education loan will end.  This is how the snowball method makes debt paying fun and interesting.


Paying off the debt is very challenging and if you have multiple debts, the case is even worse. Try the Debt snowball method, you will surely love it and your debts will be paid off quickly.

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