How to Use the Debt Snowball Method: A Step-by-Step Guide

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Those looking to break free from debt will likely succeed by adopting a financial strategy or method. The The debt snowball method, first popularized by personal finance expert Dave Ramsey, is one such strategy. Find out if the debt snowball method is the way to go for you.

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What you need to know about the debt snowball method

The debt snowball method is a widely used approach to paying off debt, along with other methods, such as the debt avalanche method and debt consolidation. With the debt snowball method, you categorize and pay debts individually, starting with the smallest and “snowballing” until they are all paid off. It lets you feel the accomplishment of paying the debt and encourages you to keep going until you are debt free.

How long does it take?

The time it takes depends on the amount of debt and the money you can invest in paying off the debt. The debt snowball method can take longer than other methods because it prioritizes paying off the smallest debts first, not the highest interest ones.

Advantages and disadvantages of the debt snowball method

The debt snowball method may work better for some people than for others. Understanding its pros and cons will help you decide if this is the right solution.


Once you feel the satisfaction of paying off your first debt, you’re more likely to be motivated to keep going because people tend to stick with a payment plan if they see quick results. Simply put, you’re more likely to stick to your commitment to debt freedom when you use the debt snowball method.

The inconvenients

Some of your larger debts may have higher interest rates than others, so this method may not be the most effective. You could end up paying more interest than if you had prioritized paying off debts with the highest interest rates first.

debt snowball method infographic

How do you apply the debt snowball method?

The snowball method is a simple process. Consider how you would apply the following steps to your financial situation.

1. Write down your debts

Record all your debts from smallest to largest.

2. Track your minimum payments

Control your other debts by paying at least the minimum due.

2. Pay off your smallest debt

Make only minimum payments on all but the smallest debt. Pay as much money as you can on the smallest debt each month until it’s paid off.

3. Start with the next debt

Put the money you used for the first debt on your next smaller debt. This is the “snowball” part. The less debt you have, the more you can focus on paying off one debt instead of several minimum payments.

5. Repeat the process until you are debt free

Continue to pay your debts one by one, from the smallest to the largest. If you follow this process, you may find that getting out of debt isn’t as complicated as it seems.

What should you do once you are debt free?

The journey to free yourself from debt can seem daunting, but paying off your debt could be the best investment you can make for your future. Now that you know the debt snowball method, decide if it’s right for you. Whether you choose this method of debt repayment or another, the sooner you take your first steps, the closer you will be to financial security.

Melanie Grafil contributed reporting for this article.

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