How to Use the Debt Snowball Method to Pay Off Debt

Being overwhelmed by debt can feel a lot like being snowed in after a blizzard. Without any extra room in your budget, it’s as if your finances are frozen, preventing you from taking a much-needed vacation, buying that new TV, or even just indulging in a night on the town. It’s no wonder why one of the most common strategies to tackle debt is known as the “debt snowball method.” 

If you’re looking to take a strategic approach to paying off your debt, the debt snowball method might be right for you.

The debt snowball method is a debt repayment strategy that focuses on completely paying off your smallest debts first, working your way up to the biggest debt.^1,2

• Why snowball? Imagine making a small snowball, then rolling it around in the snow. As the snowball rolls and more and more snow sticks to it, it gets bigger and bigger until it becomes a snow boulder.
• How does that relate to debt? With the debt snowball method, you start small—paying off your smallest debt as quickly and aggressively as possible, then moving on to larger and larger debts—aiming to eradicate each debt one at a time.^1,3

By the time you get to larger debts, you have extra cash freed up from no longer having to make payments on the smaller debts. This creates a “snowball” that grows and grows until you’re debt-free. It’s all about building momentum to keep you motivated so you maintain the discipline you need to get out of debt. 

Think of it this way: Chipping away at a large loan can feel endless, even if you’re paying extra each month. But when you pay extra on a small debt to knock it out as quickly as possible, you can see results—fast. And those fast results can help motivate you to stay on track.

Paying off any debt requires self-discipline.³ For the debt snowball method, the idea is to gain momentum and tackle debt as quickly and intensely as possible, even if it means you could end up paying more money in the long run due to interest.^3,4

Before trying the debt snowball strategy, list all your debts in order from smallest dollar amount to largest, regardless of interest rate. Then:

• Start paying off your smallest debt. The goal is to attack it with all your might, making the highest payments you can afford (while still making minimum payments on all other debts, of course).¹
• Once the smallest debt is paid off, take the amount you were paying on that debt and put it towards paying off the next-smallest debt.¹
• When that debt is paid off, take that even bigger monthly payment and use it towards the next-smallest debt.
• Rinse and repeat until you’re debt-free!

One advantage of the debt snowball method is the positive psychological effect it brings.³ For many people, achieving small triumphs feels good. The idea is that that good feeling will push you to keep working hard to tackle your debts.

The debt snowball method is often more expensive in the long run because more interest accrues on larger loans over time.^1,4 In addition, it won’t work for everyone. Depending on a person’s personality and what motivates them, eliminating debt when faced with the immediate option to spend money can be difficult.³

If you don’t have the funds to make extra payments or you’d rather pay the absolute minimum on interest, there are other options, including:

• Debt snowflaking.⁶
• The debt avalanche.⁷

If you’re strapped for cash, debt snowflaking involves putting any extra small sums of cash (snowflakes) toward debt repayment.⁶ “Snowflakes” could be a tax refund or a $10 bill found in your jacket pocket, for instance. If you want to save on interest, the debt avalanche method focuses on paying off your highest-interest debts first, regardless of loan size.⁷