The Debt Snowball Method

Tackling $21K of student loan debt in 11 months was no easy feat, but the Debt Snowball Method helped me to achieve my goal. So what the heck is the Debt Snowball Method?

Simply put, the Debt Snowball Method is a debt repayment strategy that helps you to build momentum while you pay off debt. Here is how it works:

• Create a list of all of your debts such as credit cards, student loans, personal loans, auto loans

• List those debts from the list above from smallest to largest, but ignore any interest rates

• The debt with the smallest balance should become your target debt to pay off

• You should continue paying the minimum balance on all debts, but apply extra debt payments towards the principal of your debt for your current target debt you identified until you are done

• Once you have finished paying off your first target debt, you will combine its minimum payment plus the extra debt payments you were applying and attack the next debt in your list

• These steps should be repeated until you are completed with paying off your debt!

Another version of the debt snowball method is to pay off your debts in categories. For example, if you want to become credit card debt free, you can list all of your current credit card balances and implement the debt snowball method that way.

To some, the debt snowball method isn’t the best mathematically since it does not account for interest and of course, I do know that, but there’s something about small wins! Tackling my lowest student loan that had a balance of almost $3K pushed me into continuing on the journey.