The debt snowball method<\/strong> has you list out all your debts from smallest balance to largest balance, ignoring interest rates. You would then:<\/p>\n

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1. Make minimum payments on all debts except for the smallest balance<\/li>\n
2. Pay as much as possible on the smallest balance<\/li>\n
3. Once it’s paid off, roll the amount you were paying on that into the next smallest balance<\/li>\n
4. Repeat this process as you plow through your list until everything is paid off<\/li>\n<\/ol>\n

   The key aspect that makes this a “snowball” method is that as you pay off each balance, you begin rolling more and more money into your next target debt. Like a snowball tumbling down a hill, that money builds momentum and grows as debts get erased.<\/p>\n

   <\/span>Why Start With the Smallest Debt?<\/span><\/h3>\n

   Supporters of the debt snowball method argue that paying off small debts first gives you some quick “wins”<\/strong> on your debt repayment journey. By knocking out those first couple of tiny debts, you start building motivation that helps you stick with your strategy.<\/p>\n

   Seeing debt balances fall to zero is extremely gratifying. You also simplify your finances by reducing the number of monthly payments. All this makes your debt repayment efforts feel more manageable.<\/p>\n

   The debt snowball isn’t overly concerned with paying down the most expensive debt first. It prioritizes small psychological victories to make you feel empowered and motivated.<\/p>\n

   <\/span>Compare it to the Debt Avalanche Method<\/span><\/h2>\n

   <\/p>\n

   The closest alternative would be the debt avalanche method<\/strong>. With this strategy, you list out your debts by interest rate instead, from highest to lowest. The process then works the same way:<\/p>