The Debt Snowball is a debt repayment method. It prioritizes debts from smallest balance to largest, regardless of interest rate.
Here's how it works:
-
List Your Debts
List all your debts except your mortgage, from smallest to largest balance. Don't worry about interest rates right now, just focus on the amount owed.
-
Make Minimum Payments
Pay the minimum on every debt except the smallest one.
-
Attack the Smallest Debt
Put every extra dollar toward your smallest debt, including side hustle income, garage sale profits, or money saved by cutting expenses.
-
Roll It Over
When one debt is paid off, roll that payment into the next smallest debt. That's your snowball, and it grows with each debt you eliminate.
-
Repeat Until Debt-Free
Keep the process going until every debt is gone. With each win, you build confidence and momentum.
Why It Works
Like a snowball rolling downhill, your progress builds speed and power as you eliminate each debt. Crossing the final debt off your list is a major milestone on your path to becoming debt-free.
Frequently Asked Questions
Here are answers to common questions about the Debt Snowball method.
Does the Debt Snowball Method Work?
The Debt Snowball method can help people stay motivated by creating quick wins and a clear repayment order. Many people find that this structure makes it easier to stay consistent.
What Is the Difference Between the Debt Snowball and Debt Avalanche?
The Debt Snowball focuses on paying off the smallest balance first. The Debt Avalanche focuses on paying off the highest-interest debt first.
Should I Include My Mortgage in the Debt Snowball?
No. The Debt Snowball method typically includes consumer debts and excludes your mortgage.
Track Your Progress
The Debt Snowball Calculator shows how fast you can become debt-free. Use our Debt Snowball Calculator to map out your path to freedom.