I get it. You may have some debt that keeps you up at night. Perhaps you even sleep like a queen or king, but deep down you know that your debts must get paid off sooner or later, preferably sooner!

What if I told you that you can get rid of your debt and finally get peace of mind by just using a snowball? Okay, not literally, but it makes it sound fun so let’s roll with it.

The snowball method consists of treating your debt like an actual snowball: start off with the smallest one and throw it down a hill. As it gains momentum and speed, it gets larger.

Here is how it actually works on debt:

Step 1: Make a list of all your debt, starting with the smallest.
Step 2: Start paying off the smallest by paying more than the minimum payment.
Step 3: As you do step 2, you also start to pay off your larger debts by making the minimum payments on time.
Step 4: Repeat.

snowball method elenny frometa

Here’s an example of what that might look like:

Debt 1: $1,500 credit card debt
Debt 2: $6,500 furniture financing
Debt 3: $7,800 car loan (please don’t do this. Buy a used car)
Debt 4: $14,780 student loans

Now that we have those four debts laid out, we are going to start paying off the first one (the one in which we owe less) completely by making significant payments each month. These significant payments are larger than the minimum.

To make things easier on us, let’s also pretend that that credit card debt is from one credit card, and the minimum payment is $35. With this method, you pay more than the minimum so that you can pay off this debt faster while minimizing interest payments.

If possible, you also want to pay your smallest debt in full as long as you can still make the minimum payments for your other debt on time.

Here’s how it would look now:

Debt 1: $1,500 credit card debt (pay $100 each month)
Debt 2: $6,500 furniture financing (pay $150 each month)
Debt 3: $7,800 car loan (pay $170 each month)
Debt 4: $14,780 student loans (pay $190 each month)
NOTE: These minimum payment numbers are not accurate. This is just to illustrate an example.

Continue making larger payments towards your smallest debt until it is completely paid off, and then do the same for the following debts until they’re all gone.

Discipline is everything

The snowball method works ONLY when you are disciplined enough to understand the drawbacks of debt, and your willingness to make sacrifices to pay them off.
This could mean getting on a tighter budget or changing your lifestyle until you are finally debt-free.

With that said, this method works according to your behavior, not a mathematical equation. If you are drowning in debt and still decide to somehow purchase the latest BMW, you don’t need a snowball method because you’ll most likely be eating snowballs for the rest of your life.

Simple? Yes. Can you do it? Definitely! Debt does not describe you. It should just motivate you to keep moving forward. Get rid of it! Start today!

Of course, the best and fastest way to get rid of debt is by making more money to pay it off. I recommend you read this article about making more money to get some ideas and become financially independent.

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