Debt can feel like it’s never-ending, especially when you’re juggling multiple balances.
It’s easy to get discouraged and lose track of where to start.
That’s why you need a clear plan.
The Debt Snowball Method is a simple, step-by-step strategy that helps you build momentum and stay motivated.
It’s one of the most popular ways to pay off debt, and for good reason.
In this post, you’ll learn how the method works, the pros and cons, and how to start using it today!
What Is the Debt Snowball Method?
The Debt Snowball Method is a debt repayment strategy that focuses on paying off your debts from the smallest balance to the largest, regardless of interest rates.
You start by listing all your debts in order of balance size, from lowest to highest.
Each month, you make the minimum payment on every debt except the smallest one.
For that smallest debt, you put as much extra money toward it as possible.
Once it’s paid off, you take the amount you were paying on that debt and roll it into the next smallest one, creating a “snowball” effect.
As you knock out each balance, your available payment amount grows larger, helping you pay off the next debt faster.
This method builds motivation through quick wins and gives you a clear path forward, especially when you’re feeling overwhelmed by multiple accounts.
It’s less about math and more about momentum.
How the Debt Snowball Method Works
The Debt Snowball Method is easy to follow and doesn’t require complicated math.
Here’s how to do it, step by step:
1. List all debts from smallest to largest (ignore interest rates).
Start by writing down every debt you owe, like credit cards, personal loans, medical bills, etc. Don’t worry about interest rates.
Instead, focus only on the balance. Order them from the smallest balance to the largest.
This gives you a clear path to follow and helps you target one debt at a time.
2. Make minimum payments on all debts.
To avoid penalties or missed payments, continue making the minimum payment on every debt on your list.
This keeps your accounts in good standing while you focus on the smallest debt first.
3. Throw any extra money at the smallest debt.
Take every dollar you can, like side hustle income, bonuses, tax refunds, or savings from cutting expenses, and put it toward your smallest debt.
The goal is to pay it off as quickly as possible.
Seeing that balance hit zero gives you a powerful mental win.
4. Once the smallest debt is paid off, roll its payment into the next smallest.
Now, take the amount you were paying on the first debt and add it to the minimum payment of the next smallest one.
For example, if you were paying $150 to the first debt and the next minimum is $50, you now pay $200 toward the second debt every month.
5. Repeat until all debts are paid.
Each time you eliminate a balance, your payment amount grows. This snowball effect builds speed and power as you go.
Eventually, you’ll wipe out your largest debts with the same focus and discipline and become completely debt-free.
Debt Snowball Example
Let’s break it down with a simple, realistic example.
Imagine you have the following debts:
- Debt 1: Credit Card – $500 minimum payment: $50
- Debt 2: Personal Loan – $1,200 minimum payment: $60
- Debt 3: Car Loan – $3,000 minimum payment: $150
Let’s say after covering all your expenses, you find an extra $200 each month to put toward debt.
Step 1: Pay off Debt 1 ($500)
You continue making minimum payments on Debt 2 ($60) and Debt 3 ($150).
But for Debt 1, you pay the $50 minimum plus the $200 extra, totaling $250 per month.
In just two months, Debt 1 is fully paid off.
That first quick win feels great, and it gives you momentum and a sense of progress.
Step 2: Tackle Debt 2 ($1,200)
Now, take the $250 you were putting toward Debt 1 and add it to Debt 2’s $60 minimum. You now pay $310 per month on Debt 2.
In about four months, Debt 2 is gone. That’s two debts wiped out in just six months. You’re feeling more in control and more confident.
Step 3: Attack Debt 3 ($3,000)
Next, take the full $310 and add it to the $150 minimum on Debt 3. You now pay $460 per month.
In roughly seven more months, Debt 3 will be paid off in full. In just under a year, you’ve cleared $4,700 in total debt.
Why It Works: The Psychology Behind It
The Debt Snowball Method isn’t just effective because of the math, but it works because of behavior and psychology.
One of the biggest reasons people struggle with debt is feeling overwhelmed.
When you’re juggling multiple payments and progress feels slow, it’s easy to give up.
The snowball method flips that feeling by delivering quick wins early in the process. Paying off even a small balance gives you a sense of accomplishment.
That emotional boost creates momentum. You’re no longer stuck—you’re moving forward.
This steady progress builds consistency. Every time you pay off a debt, it reinforces the habit of following a plan.
That routine becomes easier to stick with, and you start to believe in the process.
The more you see your balances drop, the more motivated you become to keep going. It also builds confidence in your ability to handle money.
Each win proves that you’re capable of taking control. That growing belief in yourself makes you less likely to fall back into bad financial habits.
Over time, the snowball method turns your mindset around, helping you replace stress with discipline and hope.
Pros and Cons of the Debt Snowball Method
Pros
- Simple and easy to follow
- No need to track interest rates
- Boosts motivation through quick wins
- Builds momentum with each paid-off debt
- Encourages consistent progress
- Helps build better money habits
Cons
- It may cost more in interest over time
- Ignores interest rates completely
- Not the most mathematically efficient method
- Larger, high-interest debts may take longer to pay off
Debt Snowball vs. Debt Avalanche
There are two main strategies for paying off debt: the Debt Snowball and the Debt Avalanche.
Both work, but they use different approaches and appeal to different goals and personalities.
Debt Snowball: Focus on Balance Size
The debt snowball method focuses on paying off your smallest balances first, no matter the interest rate.
This method gives you quick wins early on, which helps build motivation and momentum.
It’s ideal for people who need encouragement, structure, and visible progress to stay on track.
Debt Avalanche: Focus on Interest Rates
The debt avalanche method takes a more math-focused approach.
You pay off debts starting with the highest interest rate first, while still making minimum payments on the rest.
This saves you more money in the long run by reducing total interest paid.
However, it may take longer to see results, especially if your highest-interest debt is also your largest.
Which One Should You Choose?
Choose Debt Snowball if:
- You feel overwhelmed by debt and need quick motivation.
- You’re more emotionally driven and want to see fast progress.
- You prefer a simple, easy-to-follow plan.
Choose Debt Avalanche if:
- Your main goal is to save the most money over time.
- You’re comfortable waiting longer for that first big win.
- You’re disciplined and don’t need external motivation.
Tips for Making the Debt Snowball Method Work
Create a strict budget to free up extra cash
Start by tracking every dollar. Know exactly what’s coming in and going out each month.
Cut back on non-essentials like dining out, subscriptions, or impulse purchases.
Every bit of extra money you find can be added to your snowball. The tighter your budget, the faster your debt will shrink.
Use windfalls, bonuses, or side hustle income to speed up progress
Any unexpected money, like tax refunds, work bonuses, gifts, or income from a side job, should go straight toward your smallest debt.
These lump sums can knock out a balance quickly and give your momentum a major boost.
Avoid the temptation to spend windfalls on wants. Use them to fuel your financial freedom instead.
Stay disciplined and don’t take on new debt
While you’re working through your snowball, it’s crucial to avoid adding more debt.
That means no new credit cards, loans, or “buy now, pay later” purchases. Stick to using cash or debit and only spend what you already have.
Taking on more debt will only slow your progress and undo your hard work.
Celebrate small victories (without spending)
Each time you pay off a debt, take a moment to celebrate. It’s a big deal. Just be careful not to reward yourself with more spending.
Find low-cost or free ways to celebrate—like taking a walk, journaling your progress, or sharing your win with someone supportive.
These small milestones keep you motivated and remind you that you’re on the right track.
Tools and Resources to Help You
Budgeting apps (e.g., YNAB, EveryDollar)
Apps like You Need a Budget (YNAB) or EveryDollar make it simple to create and manage a monthly budget.
They help you see where your money is going, plan ahead for debt payments, and adjust your spending as needed.
Many of these tools also let you track your debt payoff in real time.
Printable debt snowball charts
Visual tools like printable charts or trackers can be powerful motivators.
Seeing your balances drop and checking off paid debts gives you a clear sense of progress.
You can find free versions online or create your own to fit your specific debts and payoff goals.
Online calculators
Debt snowball calculators let you plug in your debt balances and monthly payment amounts to create a full repayment plan.
They show how long it will take to become debt-free and how much you’ll pay over time.
Some also allow you to compare snowball vs. avalanche strategies side by side.
Support groups or debt-free communities
Joining a community—whether it’s a Facebook group, subreddit, or local meetup—can keep you accountable and encouraged.
These spaces are filled with others going through the same process.
You can share wins, ask for advice, or get inspired by others who’ve reached their goals.
Final Thoughts
The debt snowball method works because it builds momentum, and not because it saves the most money on interest.
What matters most is staying committed to the plan.
Start small, stay consistent, and celebrate every step forward.
Progress is progress, and it adds up faster than you think!
FAQs
Is the debt snowball method right for everyone?
Not always. It’s great for people who need motivation and quick wins to stay on track.
But if your top priority is saving the most on interest, the avalanche method might be better.
Can I switch from snowball to avalanche later?
Yes. You can start with the snowball method to build momentum, then switch to the avalanche method once you feel more confident and focused.
What if two debts have the same balance?
If two debts have the same balance, choose the one with the higher interest rate or the one that feels more urgent or frustrating.
Either way, just keep moving forward.
Should I close accounts after paying them off?
Not necessarily. Keeping paid-off accounts open can help your credit score by improving your credit utilization and length of credit history.
Only close them if there’s a good reason, like high fees or temptation to spend.
What if I miss a month?
Life happens. If you miss a payment or can’t contribute extra one month, don’t give up. Pick up where you left off and keep going.
Progress is still progress, even if it’s slower than planned.