The snowball method is all about quick wins to keep you motivated—perfect if you need a boost to stay on track! Here’s how it works!

Let’s dive into the snowball method!

What Is the Snowball Method?

Made popular by Dave Ramsey, the snowball method focuses on paying off debts with the smallest balance first—giving you quick wins to stay motivated!

How to Use the Snowball Method

Follow these 5 simple steps:

1. List All Your Debts

Write down every debt you have:

• Credit cards
• Student loans
• Personal loans
• Car loans For each, include:
• Total balance
• Interest rate
• Minimum monthly payment

2. Make the Minimum Payment on All Debts

Never skip a minimum payment—protects your credit score!

3. Put All Extra Money Toward the Debt with the Smallest Balance

Use any extra cash (side hustle, tax refund, cut expenses) to pay extra toward the smallest debt first!

4. When That Debt Is Paid Off, Roll That Money Into the Next Smallest Debt

Take the money you were putting toward the first debt and add it to the minimum payment of the next smallest—your payment “snowballs” bigger every time!

5. Repeat Until All Debts Are Gone

Keep going—each paid-off debt gives you more momentum!

Example of the Snowball Method

Let’s say you have these debts:

• Credit Card A: $5,000, 25% APR, $150 min
• Credit Card B: $3,000, 18% APR, $90 min
• Student Loan: $10,000, 6% APR, $110 min

Step 1: Order by balance (smallest first): B, A, Student Loan. Step 2: Pay min on all ($150 + $90 + $110 = $350). Step 3: Pay extra $200 to Card B—$290/month total to Card B! Card B is paid off in ~11 months—quick win! Now roll that $290 to Card A—$440/month to Card A! Then roll all to student loan—$550/month!

Debt	Balance	APR	Min Payment
Credit Card B	$3,000	18%	$90
Credit Card A	$5,000	25%	$150
Student Loan	$10,000	6%	$110

Pros of the Snowball Method

• Quick wins: Pay off small debts fast—motivates you to keep going!
• Simple: Easy to understand and follow!
• Good for motivation: Perfect if you need to see progress fast!

Cons of the Snowball Method

• Pays more interest: Since you’re ignoring interest rates, you’ll pay more total interest over time!
• Still requires discipline: You have to stick with it after the first few wins!

Snowball vs. Avalanche Method

• Snowball: Smallest balance first—more motivation, pays more interest.
• Avalanche: Highest interest first—saves most money, less motivation.
• The best method is the one you’ll actually stick with—consistency is key!

Tips for Success with the Snowball Method

• Make a budget: Find extra cash to put toward debt!
• Celebrate every win: When you pay off a debt, celebrate (small celebration—no new debt!)!
• Track progress: Use a visual tracker (paper, app, spreadsheet) to see how far you’ve come!
• Cut expenses: Find $100-$200 extra per month to put toward debt!

Frequently Asked Questions

Is the snowball method effective?

Yes—if it keeps you motivated! The best method is the one you’ll stick with!

Does the snowball method work for big debts?

Yes—you’ll pay smaller debts first, then put more toward big ones!

Can I switch between methods?

Absolutely—do what works for you!

Final Thoughts

The snowball method is perfect for people who need motivation—quick wins keep you going, and before you know it, you’ll be debt-free!