How to Payoff Your Debt Using the Debt Snowball Method?

 In Credit Repair for Home, Payoff Your Debt, The Debt Snowball Method

Have you ever observed a small snowball turn into a big boulder after it has rolled down a snow-covered ground? As it rolls, the small matter picks up more snow, leading to a greater mass and surface area. The ball creates a progressive impact as it goes onward, becomes larger and larger, faster, and more powerful until it stops at a certain point in time. This activity is called the Snowball Effect or Method. It is widely used in various fields of study to illustrate a specific process. For example, in psychology, it is used for a better understanding of influencing people and compliance.

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For this article, we will talk about the snowball method to remove one of the worst things adding up to the weight of our shoulders, which is debt. Hence, the Debt Snowball Method. It is a “debt reduction strategy” where we aim to knock out all remaining balances from smallest to largest.

This applies to those who are already in their Baby Step 2 (see the 7 Baby Steps by Dave Ramsey), wherein you are now on all your bills and have a $1,000 starter emergency fund savings! It also best applies to non-mortgage debts such as cars, credit cards, and student loans.


To begin, follow these steps:

  • STEP 1: List all your outstanding debts and rank them from smallest to largest, regardless of interest rates. Take note to leave the house loan behind.
  • STEP 2: Continue paying the minimum for the debts you have listed, except the smallest one.
  • STEP 3: Pay for the smallest debt as much as you can. In this step, it is better to consider other ways aside from your daily work to pay as much and as early as possible for the smallest outstanding balance. Either you side hustle or you tighten up your budget (Gazelle Intense). The goal is to eradicate quickly and wisely as possible.
  • STEP 4: After you have finally paid for the smallest debt, move over to the next in the list. Repeat steps 1 to 3, then continue paying off one by one until you are debt-free!


Let’s put a real-life example so you can have a better view of it. Let’s say, you have three existing loans, namely the table below. I will put snowball values on bold in the steps provided so you can understand how this method is beyond powerful!


Medical $400 $50
Car 5,500 120
Student 7,000 95


  • Step 1: We rank them from smallest to largest: Medical, Car, Student debts.
  • Step 2: Because our medical loan is the smallest, we make continious minimum payments for all debts except it.
  • Step 3: Remember, our goal is to knock out all debts from the smallest to largest. So, because we now have a side hustle and we are gazelle intense, we were able to save $400. Because we are paying $450 for the medical bill every month ($400 loan plus $50 minimum payment), we can now eradicate this loan immediately using our saved money! Goodbye, medical bill!
  • Step 4: We move forward to the next, which is the car loan. From our little snowball of $450, it now becomes a snowball of $570 ($450 plus $120 car loan minimum payment). Dividing it from the amount of loan, which is $5,500, you can already say farewell to it after only 10 months! Wow!

You are now onto your next and last outstanding loan. Our snowball of $570, as it moves onward, becomes larger and now amounts to $665 ($570 plus $85 student debt minimum payment)! Paying it consistently, you will finish it only in 11 months! Absolutely amazing! Using the snowball method, you now have eradicated ALL your loans in just 22 months or nearly 2 years!

While all these seem pretty much exciting and promising, you must also keep in mind that this will not work without your discipline, hope, hard work, and patience. No one can ever knock out all his/her debts by targeting first the largest. It will not work, trust me. Give this method a try, sprinkle the behaviors mentioned, then Ta-da! Goodbye, debts! Goodbye, headache! Welcome, free life! Welcome, financial peace!

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