What is the debt snowball method?

By Rebecca Lake

Reviewed by Kimberly Rotter

Oct 23, 2023

Read time: 5 min

Young man holding snowball with wife.

Key takeaways:

  • In a debt snowball, you pay off your smallest balance first. 

  • Because it gets you to your first win in the shortest time, a debt snowball could give you the motivation you need to stick with your debt payoff plan.  

  • The debt avalanche and debt blizzard are alternatives to the snowball plan.

When you've had it up to here with debt, it's time to find a solution. And we don’t mean the mathematical kind. We mean the kind that makes you feel like you’re really doing something to get ahead.

If crunching numbers and analyzing spreadsheets don’t set your soul on fire, fuhgettaboutit. Keep it simple and look at a debt snowball strategy. Here’s how it works.

What is the debt snowball method and how does it work?

A debt snowball is when you pay your debts off from smallest balance to highest. That’s it. If you can look at your debts and figure out which one is the smallest, you’ve already cracked the code.

The trick is to pay as much as you can against your smallest debt. And while you're doing that, you make minimum payments on all your other debts.

Once you pay off your smallest debt, you roll that payment over to the next debt on the list (plus the minimum payment you were already making). 

It’s like a snowball racing downhill, picking up snow as it rolls. Each time you pay off a debt, your payment gets bigger and bigger, and your snowball picks up speed (you pay off your debts faster and faster). You keep going until your debts are gone. 

Benefits of using the debt snowball method

The biggest benefit of the snowball method is that paying off the smallest debt first gives you your first success at the earliest possible time. Paying off your first debt feels amazing, and it’s just the sort of mojo that can help you feel good about the sacrifices you’re making to clear your debts. 

Let’s face it. Getting out of debt isn’t easy. If you feel like you’re working like crazy but hardly making any progress at all, we feel you. 

The joy of a payoff can make your hard work feel so worth it, and that’s why the snowball method is a popular choice for people who are serious about getting rid of their debts.

If you've struggled with paying down debts, the debt snowball takes the guesswork out of how to approach it. 

5 steps to get rid of debt using the snowball method

Putting a debt snowball into action isn't difficult. If you're starting from scratch, here's how to get your debt snowball plan going. 

  • Decide which debts to include. The first thing to do is figure out which debts to add to your debt snowball. The snowball method works well for credit card debts, student loans, car loans, and any other debts you want to be done with.

  • Order your debts. Once you know which debts are going into your snowball plan, rank them from smallest balance to highest. For example, a credit card with a $250 balance goes at the top of your list, while a $5,000 balance goes at the bottom. 

  • Look at your budget. A debt snowball will be more successful if you give it everything you’ve got. Count on putting as much money as possible toward your smallest debt. Look at your budget and figure out how much you can devote to your payoff plan.  

  • Pay as much as you can to your smallest debt. Once your debts are in order and you know what you can pay, you send as much as you can to your smallest debt. Find line items in your budget that you’re willing to cut back on so you can make even larger payments against your debt.

  • Keep up with your other debts. Don’t pay extra toward your other debts, but make your minimum payments on time. 

  • Snowball your payment. Once you've paid off your smallest debt (congratulations!), take the payment you were making against it and add it to the minimum payment for the next debt on the list. Once that debt is paid, repeat the process with the next debt.  

The debt snowball method gets you into a groove because you know what to do every time you pay off a debt. When one balance goes to $0, you just slide its payment over to the next debt until they're all paid off. 

Tips for a successful debt snowball

The key to a successful debt snowball is sticking with the plan. You don't have to do anything special—just keep making your payments and rolling them over. 

Getting a quick win or two right off the bat can help you stay energized and committed to your longer-term debt goals. 

You can also find other ways to incentivize yourself to keep up with your debt snowball. For example, you might allow yourself a small reward each time you pay off a debt. Or you could create a chart where you can mark off milestones, such as every time you lower your total debt by $500.  

Having an accountability partner can also be a huge help. For example, if you know a friend or family member who's struggling to pay off debt, you could become debt paydown buddies. Once a week or once a month, check in with each other, share your biggest wins, and vent about any hiccups in your plan. Play games related to your debt payoff, like challenging each other to find expenses to eliminate.

Leave debt behind, so you can move forward

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Other ways to get rid of debt

The debt snowball is just one way to tackle high-interest credit cards, loans, and other debts. Here are a few other ways to get rid of debt. 

  • Consolidate it. Debt consolidation means taking out a loan to pay off multiple debts. You then have just one debt payment to make. Two popular ways to consolidate debts are personal loans and home equity loans.

  • Try a debt management plan. A debt management plan, or DMP, is a structured plan for paying off your debts in full in 3 to 5 years. A non-profit credit counselor administers the plan. You make one payment, and the counseling agency distributes the money to your creditors. You’ll need to stop using credit cards while you’re in the plan. 

  • Resolve your debt. Debt resolution means negotiating with creditors to reduce the amount you owe. This option is for people who are experiencing a hardship that's making it difficult or impossible to fully repay their debts. 

Talking to a debt expert can help you figure out which path to take. Whether it's the debt snowball method or something else, you'll feel better once you have a clear plan in place.

Rebecca Lake - Author

Rebecca is a senior contributing writer and debt expert. She's a Certified Educator in Personal Finance and a banking expert for Forbes Advisor. In addition to writing for online publications, Rebecca owns a personal finance website dedicated to teaching women how to take control of their money.

kim rotter 2022 2

Kimberly is Achieve’s senior editor. She is a financial counselor accredited by the Association for Financial Counseling & Planning Education®, and a mortgage expert for The Motley Fool. She owns and manages a 350-writer content agency.

Frequently asked questions

The debt snowball can work—if you're good about following through. If you're not committed to following your plan, or you run up new debt while trying to pay off old balances, you won't get the best results. Some people believe the debt snowball is the most motivating debt payoff strategy because it’s the fastest way to pay off your first debt.

The three strategies for getting out of debt are:

  • Debt snowball: Pay off your smallest debt first 

  • Debt avalanche: Pay off your debt with the highest interest rate first

  • Debt blizzard: Pay off the smallest debt first, and then switch to the avalanche method

Save a modest ($1,000 to $2,000) emergency fund first, then focus on paying off your debt. Once your debts are paid off, you can focus on building a larger rainy day fund.

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Get rid of your debt and free up your cash flow without a loan or great credit.

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