The Debt Snowball Method
A simple, proven strategy for paying off debt by building momentum.
How it works
The debt snowball method is straightforward:
- List all your debts from smallest balance to largest
- Pay the minimums on every debt each month
- Put any extra money toward the smallest debt
- When the smallest is paid off, roll that payment to the next one
- Repeat until all debts are gone
As each debt is eliminated, the payment you free up gets added to the next target — your "snowball" grows bigger and rolls faster with each payoff.
Why it works
The snowball method isn't the most mathematically optimal strategy, but it's one of the most effective ones in practice. Paying off a debt completely — even a small one — gives you a real win. That sense of progress keeps you motivated to stay the course.
Most people who struggle with debt don't fail because they lack the math skills. They fail because they lose motivation. The snowball method is designed to give you early wins and build momentum.
Snowball vs. Avalanche
The debt avalanche targets your highest-interest debt first, which minimizes total interest paid. The snowball targets the smallest balance first, which maximizes motivation.
The best strategy is the one you'll stick to. If you're highly disciplined and motivated by numbers, the avalanche may save you more money. If you need psychological wins to stay on track, the snowball is often the better choice.
Not sure which to pick? Use the Sort by Strategy button in the app to run both calculations side-by-side and see the exact difference in payoff date and total interest for your specific debts.
Example
Say you have three debts:
- Credit card — $800 balance, $25 minimum
- Car loan — $4,200 balance, $180 minimum
- Student loan — $12,000 balance, $120 minimum
With $400/month to spend on debt, you'd put $25 + $180 + $120 = $325 toward minimums, leaving $75 extra. That $75 goes to the credit card. Once the credit card is paid off, that $100/month ($25 min + $75 extra) rolls to the car loan. And so on.