Build unstoppable momentum with the debt snowball method. Pay off smallest debts first for quick psychological wins that keep you motivated on your journey to debt freedom.
Enter all your debts into the debt snowball calculator with their current balances
The debt snowball calculator automatically orders debts from smallest to largest balance
Pay minimums on all debts, then throw extra money at the smallest debt
Once paid off, roll that payment to the next smallest debt, creating a snowball effect
This entire amount goes to your smallest debt
Enter your debts to see how the debt snowball method can help you build momentum and achieve debt freedom through quick psychological wins.
The debt snowball method is a debt reduction strategy popularized by financial expert Dave Ramsey. This approach prioritizes paying off your smallest debts first, regardless of interest rates. The psychological victories from eliminating debts quickly create momentum and motivation to tackle larger debts.
Here's how it works: List all your debts from smallest to largest balance. Make minimum payments on everything except the smallest debt, which you attack with every extra dollar. Once that's paid off, roll that payment into attacking the next smallest debt, creating a "snowball" effect that grows larger as you eliminate each debt.
If you have a medical bill ($500), credit card ($2,500), car loan ($8,000), and student loan ($22,000), the snowball method targets the $500 medical bill first. This quick win provides immediate satisfaction and proof that you can eliminate debt, building confidence for the journey ahead.
For a detailed comparison, read our comprehensive guide: Debt Snowball vs Debt Avalanche
| Aspect | Debt Snowball | Debt Avalanche |
|---|---|---|
| Strategy | Smallest balance first | Highest interest rate first |
| Psychological Impact | Quick wins boost motivation | Slower initial progress |
| Total Interest Paid | Higher overall cost | Lowest (saves most money) |
| Success Rate | Higher completion rate | Requires more discipline |
| Best For | People needing motivation & quick wins | Math-focused, disciplined individuals |
Research from behavioral economics shows that the snowball method's psychological benefits often lead to higher success rates, even though it may cost more in interest. Harvard Business Review studies found people using the snowball method paid off debts faster due to increased motivation from early victories.
Write down every debt you owe: credit cards, student loans, car loans, medical bills, personal loans. Include the creditor, balance, minimum payment, and interest rate.
Arrange your debts from smallest to largest balance. Ignore interest rates completely - this is about building momentum through quick wins.
Pay minimums on all debts except the smallest. Attack that one with every extra penny - sell items, work overtime, cut expenses.
When you pay off the smallest debt, take its payment and add it to the minimum payment of the next smallest debt. Your snowball grows!
Continue this process, watching your snowball payment grow larger with each eliminated debt until you're completely debt-free.
The debt snowball method is Baby Step 2 in Dave Ramsey's proven 7 Baby Steps to financial freedom. Understanding where it fits helps ensure long-term success:
According to Ramsey Solutions, people using this system pay off debt in an average of 18-24 months and report higher success rates than those using mathematical optimization alone.
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Important: Debt Planner is an educational tool only. We are not licensed financial advisors, credit counselors, or debt management professionals. All calculations are for educational purposes. Please consult qualified financial professionals before making significant financial decisions.
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