If you have debt that you’re trying to pay off, you know that it can be overwhelming to know what to pay off first, make your payments each month, and feel like you’re making progress.

However, one of the best techniques to get out of debt is by using the debt snowball method. With this method, you can gain payoff momentum and confidence as you see your debts eliminated one by one.

Here is some information about how you can prioritize your debt and determine which to pay off first using the debt snowball method, including how it works, and alternatives for debt repayment.


What is the debt snowball method?

This strategy is used to reduce debt by paying off debts in order of smallest to largest. The idea is that you gain momentum, like a snowball, as you pay off your debts in total one at a time.

By focusing on paying off the smallest debt first, while continuing to make minimum payments on your other balances, you can then take the money you were allocating to that debt and put it toward the next smallest balance. Continue this cycle until all your debt is paid.

While you may pay more in interest over time, and it can be difficult to contribute to savings in the meantime, that’s ok. The early “wins” of paying off balances in full can help keep you motivated and makes your largest debt less intimidating.


How does the debt snowball method work?

Once you have at least $1,000 in an emergency savings fund, you’re ready to start paying off your debt. There are four steps to the debt snowball method:

  1. List your debts from smallest to largest, regardless of interest rate. Do not include your mortgage as one of your debts, but include all others such as auto loans, student loans, medical bills and credit card debt.
  2. Make minimum payments on all your debts except for the smallest one.
  3. Pay as much as possible toward your smallest debt until it’s paid off.
  4. Continue this cycle with your next smallest debt, and then the next, until you’re debt free.

The most important part of using this method is ensuring you have a strict spending budget, since all your extra cash will have to be put toward paying off your debt. Cut out all unnecessary spending and take other steps to help get additional income.


Alternative methods to paying off debt

While the debt snowball method is about changing your behavior and continuing repayment momentum, leading to paying off debt faster, there are other alternatives to paying off debt.

  • Avalanche method: Pay the minimum amount of each debt account, and then use whatever is left to pay off your remaining debt starting with the account with the highest interest rate. Once that account is paid off, move on to the next one.

For each account you pay fully off, you can put money toward the next account and the highest interest rates are eliminated first. However, it can seem like you’re not making any progress with this method, which can make it difficult to stick to.

  • Balance transfers: Move credit card balances to a new card with a lower interest rate, and use the new card to pay off the owed balance of your old card. This may help you save money on interest and consolidate payments, but the lower interest rate on the new card may only last for a limited time.
  • Debt consolidation loans: Take out a low-interest personal loan to pay off high-interest debt. This helps you get out of debt faster, so you only have the one loan to pay off. However, it’s possible you won’t get a better rate on your new loan than your current debt.



Caitlyn Callahan

Caitlyn is a freelance writer from the Cincinnati area with clients ranging from digital marketing agencies, insurance/finance companies, and healthcare organizations to travel and technology blogs. She loves reading, traveling, and camping—and hanging with her dogs Coco and Hamilton.