How To Use the Debt Snowball Method: Step-By-Step Guide

Shot of a young man going through his finances at home.

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Those who want to get out of debt are likely to succeed if they employ a financial strategy or method. That One such strategy is the debt snowball method, first popularized by personal finance expert Dave Ramsey. Find out if the debt snowball method is right for you.

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What you should know about the debt snowball method

The debt snowball method is a widely used approach to debt repayment, along with other methods such as the debt avalanche method and debt consolidation. With the debt snowball method, you categorize and pay off debt one at a time, starting with the smallest and “snowballing” until they’re all paid off. This allows you to feel the fulfillment of debt payment and encourages you to keep going until you are debt free.

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How long does it take?

How long it takes depends on the amount of debt and the money you can use to pay off the debt. The debt snowball method can take longer than other methods because it pays off the smallest debt first, not the highest-interest ones.

Pros and Cons of the Debt Snowball Method

The debt snowball method can work better for some people than others. Understanding the pros and cons will help you decide if it’s the right thing to do.


Once you feel the satisfaction of paying off your first debt, you’re more likely to be motivated to keep going as people tend to stick to a payment schedule when they see quick results. That means you’re more likely to meet your commitment to becoming debt-free if you use the debt snowball method.


Some of your larger debts may have higher interest rates than others, so this method may not be the most efficient. You may end up paying more interest than if you paid off the debt with the highest interest rate first.

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debt snowball method infographic

How do you use the debt snowball method?

The snowball method is a simple process. Think about how you would apply the following steps to your financial situation.

1. Write down your debts

List all of your debts in order from smallest to largest.

2. Keep up with your minimum payments

Stay on top of your other debts by paying at least the minimum amount due.

2. Pay off your smallest debt

Make only the minimum payments on all but the smallest debt. Pay as much money as you can on the smallest debt each month until it’s paid off.

3. Start with the next debt

Put the money you used for the first debt on your next smaller debt. This is the “snowball” part. The less debt you have, the more you can focus on paying off one debt rather than making multiple minimum payments.

5. Repeat the process until you are debt free

Continue paying off your debts one by one, from the smallest to the largest. If you follow this process, you might find that getting out of debt isn’t as complicated as it seems.

What should you do after you get out of debt?

The road to debt freedom may seem intimidating, but paying off your debt could be the best investment you can make for your future. Now that you know the debt snowball method, decide if it’s right for you. Whether you choose this or another debt restructuring method, the sooner you take the first steps, the closer you will be to financial security.

Melanie Grafil contributed to the reporting for this article.

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