What is Debt Snowballing

When you are in debt you need to have a plan to help you get out of the deep hole you have dug yourself into. In order to this you need to budget.  One type of financial plan that works for many is called debt snowballing. The theory is to list the money you owe and pay the smaller debts off first.  Just like a snowball, you start small and end big.

Making the list

Pull up your credit report to make sure you have a list of every debt that you owe.  Annual Credit Report is a free website that you can pull up your statement. Once you look at these debts, list each one in order of money that you owe. The smallest amount of debt should be put on top and the largest on bottom.

Start paying

First and foremost you want to pay each bill on time. The late payments to any bill add up very quickly. You are going to start paying each bill the minimum payment only. The only exception is the smallest bill you owe. This bill you are to take as much money as you can and put it towards the bill. The more you put towards the bill, the quicker it will be paid off.


Once you have paid the small debt, you will have a sense of accomplishment. Now you are going to start doing the same method with your smallest debt. All other bills will only get the minimum payment and you will pay as much as possible towards the smaller debt. Your snowball is now growing.

Picking up momentum

Once you have paid off the first few debts, the paying off of your bills will soon pick up pace. The money you have no longer using to pay the smaller bills will help increase each bill you begin to pay off.

Sticking to the plan

Once you have started this budget, stay with it. You are slowly getting out of debt. Each time you pay off one bill, you have found success. It will be challenging at times, but the rewards are worth it.


According to Dave Ramsey “It is easier to knock off debts and see results and you will start to win in debt reduction.” This plan takes patience and diligence to ensure the success of your financial freedom.  Ramsey’s thought is starting a habit of paying your debts off will help you stay on course.

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