The debt snowball method is simple to understand but powerful in execution. It's helped countless people go from overwhelmed by debt to completely debt-free.
Here's exactly how to do it, step by step.
What Is the Debt Snowball Method?
The debt snowball means paying off your debts in order from smallest balance to largest, regardless of interest rate. As each debt is eliminated, you "roll" that payment into the next debt, creating a snowball effect.
Why ignore interest rates? Because debt payoff is as much psychological as mathematical. Quick wins early in the process build momentum and prove to yourself that you can do this.
Step 1: List All Your Debts
Write down every debt you have:
- Credit cards
- Personal loans
- Medical bills
- Car loans
- Student loans
- Money owed to family
For each debt, record:
- Current balance
- Minimum payment
- Interest rate (for reference)
Example:
| Debt | Balance | Minimum | APR |
|---|---|---|---|
| Store Card | $450 | $25 | 26% |
| Visa | $2,300 | $65 | 22% |
| Car Loan | $8,500 | $285 | 6% |
| Student Loan | $15,000 | $175 | 5% |
Step 2: Order by Smallest to Largest Balance
Reorganize your list by balance, smallest first:
- Store Card - $450
- Visa - $2,300
- Car Loan - $8,500
- Student Loan - $15,000
This is your attack order.
Step 3: Find Your "Extra" Money
Your snowball's power comes from paying more than minimums. Calculate:
Total minimum payments: Add up all your minimum payments. In our example: $25 + $65 + $285 + $175 = $550
Available for debt: What can you commit to debt payments total? Let's say $700/month.
Your extra payment: $700 - $550 = $150 extra per month
Don't have extra money? Consider:
- Cutting subscriptions
- Selling unused items
- Picking up overtime or a side gig
- Temporarily reducing non-essential spending
Even $50 extra makes a difference.
Try It Yourself
See your personalized numbers with our free calculator.
Open Debt Snowball CalculatorStep 4: Attack Debt #1
Put all your extra money toward the smallest debt while paying minimums on everything else.
Month 1:
- Store Card: $25 minimum + $150 extra = $175 payment
- Visa: $65 (minimum)
- Car: $285 (minimum)
- Student Loan: $175 (minimum)
After Month 1, Store Card balance: $450 - $175 + ~$10 interest = ~$285
Month 2:
- Store Card: $175 again
- Balance after payment: ~$120
Month 3:
- Store Card: Final payment of ~$120
- DEBT #1 ELIMINATED!
Step 5: Roll the Payment Forward
Here's where the magic happens. That $175 you were paying on the store card? It doesn't go back into your pocket. It goes to Debt #2.
Month 4 (Visa becomes the target):
- Visa: $65 minimum + $150 extra + $25 (freed from store card) = $240/month
- Car: $285 (minimum)
- Student Loan: $175 (minimum)
At $240/month, the $2,300 Visa is gone in about 10-11 months.
Step 6: Keep Rolling
When Visa is paid off, your snowball is now $240 + $65 = $305 extra.
Car loan attack:
- $285 minimum + $305 = $590/month
- $8,500 balance = about 15 months to payoff
Final debt (Student Loan):
- $175 minimum + $590 = $765/month
- $15,000 balance = about 20 months
The Complete Timeline
| Debt | Starting Balance | Months to Payoff | Total Paid |
|---|---|---|---|
| Store Card | $450 | 3 | ~$475 |
| Visa | $2,300 | 11 | ~$2,640 |
| Car | $8,500 | 15 | ~$8,850 |
| Student Loan | $15,000 | 20 | ~$15,300 |
Total time: About 49 months (4 years)
Without the snowball method, just paying minimums? You'd be paying for 15+ years.
Tips for Snowball Success
1. Don't Skip the Small Wins
That $450 store card might seem too small to matter. It's not. Eliminating it in 3 months proves the system works and frees up mental energy.
2. Automate Everything
Set up automatic payments for all minimums. Then automate your extra payment to the target debt. Remove willpower from the equation.
3. Keep a Visual Tracker
Print a simple chart. Color in your progress. Seeing that debt bar shrink is incredibly motivating.
4. Celebrate Milestones (Cheaply)
Paid off a debt? Celebrate! But do it without spending much—a nice home-cooked meal, a movie night, a day trip. Don't undo your progress.
5. Expect Setbacks
Life happens. An unexpected expense might slow you down. That's okay. The snowball method is resilient—just pick back up where you left off.
Try It Yourself
See your personalized numbers with our free calculator.
Open Extra Payments CalculatorWhat About High Interest Rates?
Yes, the debt avalanche method (highest rate first) saves more money mathematically. But the snowball works because it accounts for human psychology.
If you've tried and failed to pay off debt before, the snowball's quick wins might be exactly what you need.
That said, you can always switch methods mid-stream or pay off a small debt for a win, then tackle a high-interest debt next.
Start Your Snowball Today
Enter your debts into our calculator and see exactly when you'll be debt-free. There's your target. Now let's hit it.