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Supercharge Your Debt Repayment With The Debt Snowball (And How To Do It)

“To change any behavior we have to slow down and act intentionally rather than from habit and impulse.” ― Henna Inam
Getting out of debt is hard. Personal finance is hard in general, but getting out of debt is just another level. The behaviors that get us into debt are definitely not the ones that are going to lead us out of it. And, debt-elimination "tips and tricks" from Pinterest or Google are great, but you’re eventually going to need a system if you really want to achieve success.
After having paid off over $43,000 of consumer debt in 2.5 years and  leading thousands of people, through the debt-elimination process, it is my strong conviction that the debt-snowball method is the absolute best one to see you through to the finish line.
“So, what is a debt-snowball" anyway?”, you might be asking.  The debt-snowball method is a strategy for paying down debt by listing all debts from smallest to largest (regardless of interest rate). Minimum payments are made on all debts except for the smallest one on the list. 
That smallest debt is attacked with what Dave Ramsey likes to call “gazelle intensity”. In other words, every extra dollar of income gets thrown at that smallest debt until it’s gone. Then, you utilize the same strategy with the next smallest debt. Naturally, you wash, rinse and repeat until all of your debt is gone.
So, why is it the best? 1) It’s simple and very easy to implement. 2) It’s “sticky” and easy to maintain, AND 3) there’s scientific data to support that it is in fact the most effective way to completely eliminate debt. Let’s unpack. 
By the way, go ahead and download our free Debt-Snowball Printable here in our “Free Products & Printables” Library.
Here’s what it looks like (click image to download):


1. It’s A Simple System And Easy To Implement

Let’s be real for a second, beginning the process of reducing debt can be super overwhelming. Even the thought of getting everything you owe down on one list can spark anxiety and dread.
If you’re struggling with the process of paying down debt, you’re definitely not alone. According to an article published by Valuepenguin.com, credit card debt alone is a huge and growing problem in the US.
American Credit Card Debt Statistics & Key Findings
  • Average American Household Debt:$5,700. Average for balance-carrying households:$9,333
  • Total Outstanding U.S. Consumer Debt:$3.9 trillion.Total revolving debt:$1.03 trillion
  • 41.2% of all households carry some sort of credit card debt.
  • Households with the lowest net worth (zero or negative) hold an average of$10,308in credit card debt.
  • The Northeast and West Coast hold the highest average credit card debt – both averaging over$8,000.
And, if you’re anything like I used to be ($43,000 of consumer debt), you may be staring down the barrel of crippling debt levels, a highly disorganized financial life, a job loss or maybe some other type of financial chaos. So usually, the mere thought of getting out of debt begins a thought process that leads to a feeling of complete overwhelm. 
“Where do I even start?", is a pretty common refrain.
Here's a short video tutorial that outlines "how to" set up your debt snowball.
That sense of overwhelm is why it’s super important to have an external system (i.e. the debt-snowball) that you can plug into and follow. It immediately removes overwhelm from the equation.
Once you’ve evaluated it and decided that you can trust its outcomes, a reliable system like the debt-snowball, allows you to detach from the feeling of overwhelm in a way that allows you to laser focus on one task at a time. And that one task at a time in the debt-snowball is always going to be that smallest debt.
I know, simple right? Exactly.
And so the debt-snowball method is exactly that simple and easy system that will allow you to focus on what you need to focus on. Once you’ve listed all of your debts, smallest to largest regardless of interest rate, you can then pour all of your energy into the task at hand, obliterating that smallest debt. 

2. It’s "Sticky" And Easy To Maintain 

This point is closely related to the first one. Debt-elimination requires you to have some systems in place to help you change your behaviors around the often emotional influences of all things having to do with your money.
You need a budget, an expense tracking method and a debt-elimination strategy that’s a do-this-then-do-this kind of system.
I learned the debt-snowball method from Dave Ramsey when I paid off my consumer debt and it changed my entire financial life (for the better) forever.
So, here’s a quick six point summary of how the debt-snowball works.
  1. List all debts smallest to largest.
  2. Don't pay attention to your interest rates.
  3. Make minimum payments on all but the debt with the smallest balance.
  4. Attack the smallest debt with every extra dollar.
  5. Once the smallest is paid off, repeat the process with the next smallest debt.
  6. Watch your momentum and motivation grow as you obliterate each "smallest" debt.
Here’s a helpful  infographic to illustrate how it works. You can even share it on Pinterest if you like:
When I started my own debt-elimination process, I was overwhelmed like most people, so the thing I loved about the debt-snowball method was that: 
1) it was immediately understandable and 
2) it required no fancy math skills for calculating percentages and then trying to prioritize my debt in that way and 
3) it gave me an immense sense of accomplishment when I paid off my first debt (and then the next and the next).
This last point cannot be overstated. Debt-elimination is hard and can be super discouraging. You've got to stay encouraged throughout the process and the momentum you get by working the debt-snowball totally meets that need.
I talk a lot more about the “why” of the debt-snowball method in this post: Pay Off Debt Using The Debt Snowball.

3. The Data Says "It Works"

So, I KNOW the debt-snowball works. Using this tool was a major factor in enabling me to eliminate my own $43,000 worth of nightmarish debt. 
So, I can promise you it works. My successful students can promise you, too. 
But if  you’re anything like I am, you want to see some data to back up this assertion. Because heck, if you’re going to go “all in” on a system, you might as well look at the data and see if it is indeed “the best”.
So, to give you that referenceable data, here are a couple of articles about the “science" for you to ingest. 

The Forbes Article

The following excerpt is from the Forbes Article About The Debt Snowball, which summarizes several different studies that pit the debt-snowball method against the debt-avalanche method (which utilizes paying down debts based on interest rates).
“What Social Science Says
In short, the science says that humans aren’t really rational creatures. The rational thing to do would be to choose the debt payoff method that saves the most money in interest. But that’s not the best way to pay off debt, according to several studies. Here’s a quick summary:
Kellogg School of Management: This 2012 study showed that people with large balances are more likely to stick with their debt payoff plan if they focus on smaller balances first.
David Gal, one of the professors who ran the study, said, ‘We found that closing debt accounts--independent of the dollar balances of the closed accounts--predicted successful debt elimination at any point in the debt settlement program.”
In short, it’s better to pay off lower balances quickly so that you’ll stay motivated for the long term.
University of Michigan: This study from 2011 played out four experiments which showed, in short, that participants tended to naturally follow the debt snowball method. However, when participants weren’t allowed to pay off the full account balance on smaller debts and were shown how much interest accrued on each debt, they were able to focus on higher-interest debts first.
Boston School of Business: This more recent study actually tested three different debt pay down strategies. First, the experimenters looked at an anonymous data set. It showed that people who focus on paying down one account at a time are more successful than those who spread extra payments across accounts.
Then, the professors did experiments with real people and imaginary debt. They ran three experiments that found:
  1. Participants who focused on one account at a time worked harder to pay down their debt.
  2. Paying down debt one account at a time helped participants feel their progress more keenly and remain more motivated.
  3. Participants focused most on what portion of the account balance they succeeded in paying off.
In short, the research agrees with the first study that paying debts off one at a time, starting with the smallest account balance, is the way to go.”

The Money Talks Article

Another important Money Talks Article About The Debt Snowball says that:
“The snowball method can be advantageous in that you quickly see progress, which might better motivate you to continue chipping away at your debts.
The value of the snowball approach has been debated. However, recent research out of Boston University’s Questrom School of Business explains there is a psychological benefit to snowballing that causes it to pay off financially.”
Do you Pinterest? Would you consider pinning this to your favorite board?
Essentially, as I’ve dug into a ton of the available research about this topic, it’s only served to reinforce my own experience as well as that of my students’. The debt-snowball method works, period.

Why It Works

Why does it work? It works because momentum, traction and hope always trumps “math”. What do I mean? I mean that mathematically speaking, the debt-avalanche method should work exceedingly well because it’s based on the tidiness of mathematics. 
In theory, just “following the math” should give you the results you’re looking for, namely total debt obliteration.
But the problem is this: personal finance is a study in human behavior and motivation and not really a study of pure data and mathematics. And we all know that human behavior is very rarely guided effectively merely by theory or by mathematics.
Quite the contrary, human behavior can most effectively be modified by factoring in “wins” that inevitably reinforce certain functional behaviors, while simultaneously muting or eradicating dysfunctional ones.
The debt-snowball is a perfect example of this.  Even though it lacks the “mathematical beauty and symmetry embodied in the avalanche method, it squarely addresses and solves the human behavior problem. And THAT is so much more important.

Conclusion & Call To Action

So, hopefully I’ve made a strong case for you that the debt-snowball is the best way to 1) prevent yourself from sabotaging your own debt-elimination efforts and 2) crossing the debt-elimination finish line.
It is indeed simple and easy to implement. It’s “sticky” in that once you get the ball rolling (pun intended), it really starts to take on a life of its own. AND, there’s an abundance of scientific data and sociological research that buttresses what I’ve shared with you about my own anecdotal debt-elimination experience as well as that of many of my students.

It's All About Behavior Change

Again, one of the biggest components of successfully getting out of debt is effectiveness in changing your behaviors and beliefs around money. And I’ll be the first to tell you that momentum, traction and “small wins” are your friend in this process.
So, the question is, are you going to use it yourself? Have you decided that you’ve “had it” with your debt? Are you ready to do something about it?
If so, I put together this FREE “Debt-Elimination Quick-Start Guide”and keep this budding momentum going. And don't worry, the debt-snowball printable is a part of this guide, so you'll be able to take what you've learned here and fast track your debt-elimination efforts.  
There is also a FREE YouTube video course/challenge you can follow to make sure you get started successfully.
Leave a comment below and let me know if/how this has been helpful for you. As a teacher, I truly treasure your feedback. It is one of the greatest gifts you can give me. 
Thanks in advance and here's to your freedom!

The Bigger Context: '8 Steps To Obliterate Your Debt'

This is the blog post that outlines the 8 steps I followed to eliminated $43,000 in debt in 2.5 years.
And whether this is your first or thousandth time on the blog, I want to make sure you have this “8 Steps” framework that ALL of our content is centered around. 
These are the steps I personally followed to obliterate $43,000+ of debt in 2.5 years
Maybe your number is bigger, maybe it’s smaller. Either way the principles are the same and I want you to have them.
0. Stop All Retirement Investing (Until Step 4)
2. Starter Emergency Fund of $1000
3. Eliminate Debts Smallest To Largest (a.k.a The Debt Snowball)
4. Full Emergency Fund of 3-6+ Months’ Expenses
5. Invest A Minimum of 15% Income Into Retirement Accounts (and increase savings rate to 50%+ if possible)
6. College Funding (if applicable)
7. Pay Off The Home Mortgage
8. Build Wealth, Serve, Be Ridiculously Generous And Go FI (Financial Independence)!
I’ve created a simple, easy to follow guide that you can use as your foundation as you navigate the absolute annihilation of your debt forever.


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When You Need More Help

And again, if you’re looking for some resources to get started, you can download our free budgeting forms. Also, if you’re in a place where you’re ready to kick your debt in the teeth, here's the link to our free “8 Steps To Erase Debt” guide for you to use as your foundation.
To your freedom,
This post may contain affiliate links. If you click & make a purchase, I receive a small commission (at no extra cost to you) that helps keep Zero Debt Coach up and running. Read my full disclosure policy.

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