The Debt Snowball Method: Everything You NEED To Know

YAY! Welcome to the beginning of your #debtfreejourney!!! I’m so excited for you! I’m going to share everything you need to know about the debt snowball method so you can find the right debt payoff strategy for YOU.

There are three main types of debt payoff strategies: The Debt Snowball, The Debt Avalanche and Debt Consolidation. Each method is completely up to personal preference, but the most important thing to remember when paying off debt is that you need a strategy.

What is the Debt Snowball Method?

The Debt Snowball Method is when you list out all of your debts in order from smallest to largest. Regardless of the interest rate, you’ll start by paying off the smallest debt amount while paying the minimum payment to all other debts.

Think back on your childhood when you made a snowman. You started with a tiny snowball and kept rolling it in the snow to make a huge base. This is exactly how this method works! The more tiny debts you pay, the easier it becomes to pay the larger ones.

How Does the Debt Snowball Method Work?

Let’s assume you have three debts to pay off:

  • $2,000 of credit card debt with a 22% interest rate, $50 minimum monthly payment
  • $15,000 student loan with a 8% interest rate, $350 minimum monthly payment
  • $8,000 auto loan with a 6% interest rate, $275 minimum monthly payment

You have (on average) $675 per month to contribute towards debt.

Using the Debt Snowball Method, you are going to make the minimum payments to your auto and student loans. You’ll want to focus all of your extra cash on the credit card debt.

Let’s say you have an extra $450 in your budget every month to contribute towards your debt.

In 4 months, you will have paid off your credit card — REALLY, YES!

Now take the $450 you were paying towards the credit card and combine it with your auto loan’s minimum payment amount. Your new amount to pay towards the auto loan is $725.

In another 11 months, you will have your auto loan paid off!

After the auto loan is paid off, you’ll roll that $725 minimum payment into your student loan! This gives you $1,075 monthly student loan payment.

In another 14 months, you’ll be completely be debt free!

Using the Debt Snowball Method allowed you to pay off $27,187 of your principle balance and interest in 2 years!

If you had only paid the minimum payment towards your debt until they were gone, it would have taken 6 years and you’d be paying $30,029 total in principle and interest!

You saved $2,842 in interest using the Debt Snowball Method!

Imagine what you could do with that extra money!

To get these calculations, I used NerdWallet’s Debt Snowball Calculator — it’s an awesome resource!


The biggest advantage (and my favorite part) when using the Debt Snowball Method is that you get quick wins by paying off the smaller debts.

This method gives a lot of people motivation checking off the small debts quickly and allows you to see the light at the end of the debt tunnel.

With other debt payoff strategies, it takes longer to payoff balances in full quickly.


Because the Debt Snowball Method prioritizes balances instead of interest rates, you will most likely lose money on interest over time.

Because of this, some people prefer the Debt Avalanche Method instead.

Final Thoughts

Understanding different debt repayment strategies helps you pick a plan that will work for YOU! What works for someone else might not be your favorite, and that’s okay!

The Debt Snowball Method is great because it allows you to quickly see the progress you are making in your debt repayment, and start checking balances off your list.

If you need a customized debt payoff plan for you, apply for 1:1 money coaching here!

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