The debt snowball method: get your finances back on track

A simple method that, in three steps, can wipe out your debts in record time, no matter how high those debts are today. Understand how!


How to use the debt snowball strategy to get out of debt

Learn how to use the debt snowball strategy to get out of debt. Source: FreePik

Debts only exist for one purpose: to be paid off. If getting rid of bills is your mission today, the debt snowball method can help you. And we’re here to show you how!

Debt Avalanche - Finance/Economy. Folder on desk with label besi

The debt avalanche method: what it is and how to use it

Learn what is the debt avalanche method and how to use it! Pay-off your debt quickly! Keep reading and find out how!

After all, a clear and simple method makes any task doable. To find out how it can solve your problem, continue in this post and start getting rid of your debts today!

What is the debt snowball method and how does it work?

The debt snowball method is a simple and practical strategy for anyone looking to get out of debt. This was based on a very simple thesis: if you can’t pay all your bills, pay the smallest ones first!

When you manage to pay off small debts, you can be motivated enough to keep paying them off. After all, for those who have many debts, paying one of them can renew hopes.

This method consists of simply ordering the debts from smallest to largest. All other criteria for each debt will be ignored for now. So pay the cheapest bill until your pile of slips runs out.

It is an extremely easy method, applicable even to those who never studied finance or went to school.


  • It is an extremely simple method to apply;
  • Compared to other methods, it is usually faster;
  • The feeling of paying small bills every month can motivate you to keep executing this strategy until the end;
  • It allows you to build good habits and improve your financial management.


  • In general terms, you can pay more by ignoring important factors in your account like interest rate;
  • This strategy can eat up your entire cash reserve;
  • If higher interest rates are on higher bills, you may take a long time to pay off your debts.

Is the debt snowball method a good choice for paying off debt?

African-american female paying bills. Dealing with expenses on smartphone. Cutting back on spending
Is the debt snowball method a good choice for paying off debt? Find out! Source: FreePik

In general terms, yes. Incidentally, it is a method of paying off debts that experts highly recommend. After all, it is extremely simple and tends to be faster than other similar methods.

So, if your strategy is to pay off your debts as quickly as possible, this is an excellent choice.

How can you get started with the debt snowball method?

The debt snowball method requires no calculations or software. To use it, you need to follow simple steps. After reading this quick tutorial, you’ll realize you can start using it today! Understand how.

Write down all your debts

Now it’s time to put your debts on paper or in a spreadsheet. Check your card statement and credit history to ensure you haven’t forgotten anything.

Arrange in a sequence

Now is the time to arrange your debts in the order in which they must be paid. Which criteria to use? The value! Just organize your debt from cheapest to most expensive.

Another extremely simple step is to look at the values and order them from smallest to largest.

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Paying your debt

This is the practical part of the method. In fact, at this point, you should check what the minimum payment is for each of your debts and settle them. Do this for all your debts or as many as you can.

After making the minimum payments, the amount left over should be used to pay off the smallest debt. The following month, repeat the process.

Pay all the minimum amounts and use the rest of your money to pay off the smallest debt. Repeat this process, and don’t stop until all your debts are paid off.

Alternatives to the debt snowball method

The debt snowball method is an excellent way to get out of debt. However, it is not unique. Below are other popular methods that may solve your problem!

Avalanche method

This is a “brother” of the snowball method. Both strategies work from debt ordering to sequential payment. However, the difference lies in the criteria used to define which debt will be paid first.

In the avalanche method, the accounts with the highest interest rate must be paid off first. This method has the advantage of controlling debt and preventing it from growing too quickly.

By the way, this is the main advantage of this method about the snowball method. However, it has the disadvantage that it may take longer for the problem to be fully resolved.

In addition, you will not always be able to fully pay off a debt if you use the avalanche method. Thus, you will not have the incentive generated by the feeling that a “microtask” was performed when paying one of the slips.

For some people, the lack of this type of stimulus can lead to abandoning the method.

Debt consolidation

Many different creditor accounts can create difficulties even in managing these. So how about turning a stack of slips into a single slip? That’s what debt consolidation can do for you.

In practice, you are asking for a loan with an amount that can pay all your bills. So, instead of multiple collectors, you have just one: your loan agency. Financially, this strategy can be advantageous if you get low-interest loans.

However, not everyone can use it. After all, not everyone will have a healthy enough credit score to get this type of loan. In any case, we recommend that you check with banks and credit unions and review the offers.

Debt management plan

Male entrepreneur working on a computer at home.
Alternatives to the debt snowball method. Source: FreePik

When things are too complicated, the best way out is to ask for help. Thus, the results can be even better if the help is professional in solving your type of problem.

In case you didn’t know, some experts study each case and decide the best way to pay off a debt. In addition to “debt consulting,” these professionals can negotiate better terms with your creditors.

These are the debt managers who can offer their services to both companies and individuals. However, the best news is that you can find this service free on websites or organizations near you. Just look for them.

Balance transfer

A function on most credit cards allows you to transfer your common debts to this one. Thus, it would be as if you turned common debts into your card balance.

By the way, this is a very similar strategy to debt consolidation. If you still don’t understand how this can help you pay off your debt, you need to learn more about credit cards.

After all, credit cards offer a 0% interest rate for a certain period. That way, you can have a chance to settle your bills without worrying about interest for months.

This will allow you to honor your commitments by paying much less. However, low or 0% interest balance transfer cards require a relatively healthy credit score. So not everyone can count on these methods.

Bottom Line

Finally, it is possible to get rid of your debts, however large. After all, if you read this text, you have already started to have ideas on how to do this. However, it is important to plan each of your future steps.

See the following post to learn more about planning and to get out of debt. Keep reading!

happy businessman holding golden key after unlock debt burden chain.

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About the author  /  José Gonçalo

I started reading about finance only to find better options than savings. Since then, I have never stopped studying finance, and I believe that writing about it is the best way to help individuals feel fulfilled and have a healthy financial life. Today, I balance finance and medical school studies.

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