The debt snowball method: 6 SMART ways to get started


    Debt snowball method

    This post originally appeared on The financially independent millennial and was republished with permission.

    Have you come across numerous methods of debt elimination? You may be wondering how to get out of a spiraling debt out of control. In that case, the debt snowball method could be an easy way to pay off debt. While there are many ways to do this, the snowball method is one of the best and easiest to implement. Additionally, if you are wondering how to become financially independent, it is important not to have unsecured debt.

    First steps with the program

    First, in case you think so, no: they’re not real snowballs (but wouldn’t be fun!). Second, you need a budget. In case you haven’t, here’s how to budget.

    First of all, the debt snowball method requires that you make a list of all of your debts in order of balance. Then you first pay out the account with the lowest balance. Of course, you would only make the minimum payments for the rest of the loans.

    Collect all of your credits

    For example, a hypothetical situation could look like this:

    • Mortgage Balance: $ 240,000
    • Car Loan: $ 18,000
    • Line of Credit: $ 9,000
    • A – Credit Card: USD 5,000
    • B – Credit Card: USD 2,000
    • C – Credit Card: USD 800

    Implementation of the Debt Snowball Method

    In this case, you will pay off credit card C first (i.e. as your original destination) first. Then pat yourself on the back as the first success! Then you work on credit card B, then A, and so on.

    You see, since you have no more payment in the accounts (starting with credit card C) that are being withdrawn, the idea is that you will then use that money to pay off the other accounts. Thus, the payout period is charged! In addition, simply paying off your debt can improve your credit score.

    What if I don’t have a lot of money to pay off my debt?

    No doubt, at the end of the month, you will have to use your extra money to pay off your debts. If you don’t have money, you need to consider asking for a raise, changing jobs, or starting a sideline.

    Is the Debt Snowball Method the Best?

    Is the Debt Snowball Method Financially Optimal for Paying Off Your Creditors? Sure, paying off your debts at the highest interest rate would mathematically and ultimately be better. However, in my own experience, this is my preferred debt reduction strategy. Why? It offers the instant gratification it takes to make it through to the end!

    The Debt Snowball Method: 6 SMART Ways to Get Started post first appeared on


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