How to Dig Yourself Out of Debt Using the Snowball Method

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dig-yourself-out-of-debtDebt is a beast that can take over your life if you don’t get it under control.

There are many ways to pay off debt. If you’ve never looked into the snowball method. made popular by Dave Ramsey , you may want to use this technique to pay off debt and minimize the amount of interest you pay every month.

Use these steps to help you get started:

1. Have a Working Budget

To effectively pay down your debt, you need to know how much money you have coming in and going out every month. Your budget must be complete and include all of your monthly payments, as well as the money you spend on food, gas, fun, and other expenditures.

Also read: How to Use Envelope Budgeting to Stay Out of Debt

2. Create a Full List of Your Debts

This may be the hardest step of the snowball method, since it requires you to look your debt in the face. Remember, once you finish this step, you’re a little bit closer to getting your debt paid off! Create a list of all of your debts, including the company to whom you owe the money and the amount you owe.

3. Order Your Debts

Order your debts from highest owed to lowest. This determines in which order you will pay off your debts and take back control of your finances. You will be paying lowest debt off first. This is a great way of doing this since the smallest debt is the most attainable, getting to cross of the list keeps you motivated.

Also Read: Top 10 Habits of Frugal People

4. Start Paying!

Now you can get down to business. Each month, you will make the minimum monthly payment on each of your debts. However, you will take all of your extra money and apply it to the first debt (the smallest one) on your list. Continue until that debt is paid. Now, take that monthly payment and add it to the payment of the second debt on the list. Continue until you have no debt!

This method is surprisingly easy and effective if you can stick to it. Getting out of debt requires dedication and hard work, but it’s all worth it once you’re debt-free.

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  1. Kristen says

    I’m a little confused. This isn’t Dave Ramsey’s snowball method, but you mentioned him at the top. Dave Ramsey’s snowball method has you list your debts smallest to largest. You start by paying off your smallest debt first.

  2. M says

    Kristen it says to pay off your smallest debt first. The object is to be able to cross off the debts as you go. By listing the biggest one first and going down you’ll see as your crossing off from the bottom up how you’re doing. It’s a better way if you ask me. It’ll feel better as you cross from the bottom up and to see all those lines. In the end though it doesn’t really matter if you list from biggest down to the smallest or the smallest to the biggest. They’re both the same (you start with the smallest first). You pay that off and whatever you were paying on that one you then pay on the next one and so on and so on. Good luck.

  3. says

    I’m starting the debt snowball this month. I was really surprised to see that my credit card debt is $4258.61. I didn’t think it was nearly that much. I’m hoping to get the first of the three cards, $547.29 paid off by the end of April. Then start on the next one which is about $1950.00. The last one is almost equal to the second one.

    • jlpenner says

      That is definitely a way to go.. but the snowball method works on the principle that it will be easier to pay off the small debts first and work to the large ones, no matter the interest rate. This works because physiologically it is easier to see your progress.


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