How to Use the Debt Snowball Method to Pay Off Debt

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Getting into debt is easy, but getting out can be hard work.

Nonetheless, the debt snowball method can help you work your way to debt freedom quickly and strategically.

In this method for debt repayment, you pay off debt progressively from the smallest balance to largest balance.

Each time you pay off a debt, you roll the money that would be used for that debt to paying off the next smallest debt.

As you pay off each debt, you’ll have more money available to apply to the next smallest debt. This progressive growth of available funds mimics a snowball getting larger as it rolls down a hill. Hence the name “debt snowball.”

Why the Debt Snowball Method Works

The debt snowball method leverages momentum over math.

The idea is to get a quick win by paying off a small debt first. This win will give you the motivation to continue aggressively attacking your debt.

It’s the same psychology that’s necessary for weight loss. If you can lose those first few pounds quickly, you’ll be motivated to continue your regimen and lose more weight.

This approach is what distinguishes it from the debt avalanche method.

Debt avalanche

The debt avalanche method is intended to save you the most money overall by attacking your debt from the highest interest rate to the smallest.

Though, both methods will get you to the ultimate goal of paying off debt.

How to Use the Debt Snowball

Using the debt snowball method is quite simple, as it only consists of four steps. In the example below, I’ll show you how the debt snowball works.

Step 1: List all of your debt from smallest to largest

If you’re following Dave Ramsey’s baby steps, then you’ll exclude the mortgage from your snowball since it’ll be paid off at a later time.

Step 2: Pay the minimum on all debts except the smallest

For this step, you’ll need to take a look at your budget and find ways to cut your expenses. You may also need to pick up a side hustle and put any extra money that you make toward paying off the smallest debt.

Step 3: Pay off the smallest debt then apply the money from that debt to your next smallest balance

As you continue to put extra money toward your debt, you’ll find that you’ll pay it off quickly.

Once the smallest debt is paid off, roll the money that was going toward it to paying off the next smallest debt. This will include the minimum payment and any extra payments that you were making toward the debt.

Step 4: Repeat until all debts are paid off

Continue this method until all debts are paid off and you’re debt free!

Debt Snowball infographic

Free Debt Snowball Calculator

If you were creating a debt snowball tracker on your own, you’d add things like an ending balance to show how much is owed after the payments are made. By doing this, you’d create a debt amortization chart of sorts.

Creating this extensive payoff tracker will give you an idea of when all of your debts will be paid off if you continue to use the method and consistently make extra payments.

Though you can create this in an excel sheet, it can get a bit tedious. You’d have to include things like interest rates and know when interest is applied. It can get complicated.

So instead of doing it yourself, I recommend using a debt snowball calculator like

This online tool allows you to input your debt balances, interest rates, and extra payment estimates and it will calculate when your debt will be paid off. The cool thing is that it also allows you to compare the debt snowball method to the debt avalanche method to determine which one is right for your debt repayment goals.

It’s a free app and it includes other features to manage your finances. I did a complete review of the tool and its features here.

Debt snowball spreadsheet

If you’re looking for a debt snowball spreadsheet, I’ve actually created one that can help you track your debt payoff!

This spreadsheet includes:

  • Debt snowball worksheet & debt payoff tracker to help you get out of debt fast!
  • Monthly & paycheck budget templates – you decide which works best for you!
  • Budget examples with real numbers that you can use as a guide (examples ALWAYS help!)
  • bill payment tracker to keep track of when bills need to be paid
  • An expense tracker to keep track of your spending
  • Savings goal/emergency fund trackers that’ll keep you motivated to reach your goals
  • Video instructions on how to use your binder (because sometimes you just need extra help!)

You can also grab these my debt snowball printable if you’d prefer writing out your debt snowball.

Summary of Debt Snowball

The debt snowball is a great method for paying off debt. In fact, it’s exactly what I used to pay off over $78,000 in student loan debt in less than three years.

I recommend checking out to figure out if this method is right for you.

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