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Are you deep in debt and wonder where to even begin? For many, debt can be overwhelming. Not to mention, it never seems to go away. As a result, many people accept debt as a way of life. Is there a way to pay off debt and pay it off fast? Let me introduce you to the best way to pay off debt: by using the debt snowball method.

What is the debt snowball method?

The debt snowball method is a simple way to pay off debt. It’s a pretty easy concept; you order your debts from smallest to largest, regardless of the interest rate. After this, you throw everything you have at the smallest debt and pay minimum payments on everything else.

Once you pay off the smallest debt, roll that payment into the next largest debt. Rinse, wash, and repeat until you pay off all of your debt!

Using the debt snowball method is more about behavior modification, not math

The reason the debt snowball method is the most effective way to pay off debt comes down to two words: behavior modification. But isn’t paying off debt more about math? In fact, many of you may be reading this and asking, “what about the debt avalanche method?”

The debt avalanche method advocates for ordering your debts based on the highest interest rates. You then tackle the debt with the highest interest rate by paying it off as quickly as you can. Afterward, you roll that payment into the next one and then the one after that.

Mathematically, the debt avalanche does indeed save you money on interest. However, it’s not the most effective in providing you with motivation. There is much research that proves the effectiveness of snowballing your debts rather than tackling them with an avalanche.

The debt snowball method provides you with motivation and momentum as you start to see some of those smaller debts disappear. It gives you drive and makes you want to get rid of debt for good!

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    Here’s an example of paying off debt using the debt snowball method

    Now we’re going to go step-by-step into an example of how to use the debt snowball method. Keep in mind that paying off debt requires focused intensity. In fact, paying off debt may take you a couple of years or more. But the good news is that it is temporary. Once you break the chains of debt you can start to realize the fullness of financial freedom!

    1. Make sure you have a budget

    Before you can begin, you need a budget. As you go through your budget, you need to be asking yourself, “What am I willing to give up?” Do you have a $120 cable bill? You might want to nix that. What about your insurance? Consider shopping around to get better rates. Are you eating out a lot? Well, you might want to cut back on restaurants until you get out of debt.

    2. Find ways to increase your income

    There are a lot of ways these days to increase your income. Some examples include working overtime, picking up an extra job, delivering food for DoorDash, driving for Lyft, and so forth. Remember, you don’t have to become a workaholic. Working extra is only necessary while getting out of debt.

    3. Order your debts from smallest to largest

    Now, this is where the fun begins! Here’s an example of what your debt might look like:

    • Credit Card 1: $500 – Minimum Payment: $25
    • Credit Card 2: $2,000 – Minimum Payment: $50
    • Car Loan: $8,000 – Minimum payment: $200
    • Student Loan: $12,000 – Minimum Payment: $150

    4. Use the debt snowball method to make your payments

    At this point, you have already made your budget and taken an extra job to free up some cash flow. In this example, we’ll say you’ve got an extra $500 to use toward your debt.

    Wow, you’ve already knocked out your first credit card in the first month! Now it’s time to snowball that $500 plus the $25 minimum payment into the next one. You’ll be making a total payment of $575 towards the next credit card (the $50 minimum payment plus the $525 you just freed up). You should be able to pay it off in about four months.

    Now look at this, in just five months you’ve paid off $2,500 in debt! Now it’s to look at that car loan. The good news is you’ve just freed up $575; add that to your $200 payment and you’re making payments of $775 per month towards that car!

    Okay, this one took a little while longer. But you keep plugging on and in 11 months you finally pay off your car and get your title in the mail. Sweet! The student loans are now looming over you. But you just remembered that you paid off $10,500 in just 15 months, and you’ve got $975 extra to put toward this student loan!

    Wow, that student loan was tough, but you stayed motivated and focused. In just over 12 months you managed to pay it off. You’re debt free in just 27 months!

    5. Reward yourself!

    In our example, we managed to pay off $22,500 in just 27 months using the debt snowball method! What now? Well, the whole point of getting out of debt is so you can live your life! Go out to eat, take a trip, or buy yourself a little something. You deserve it!

    Just remember that you still a budget, but now you can budget to allow more fun in your life!

    Are you ready to get serious about paying off debt?

    You’ve seen how paying off debt using the debt snowball method is effective. Now what are you going to do?

    I am an advocate for getting rid of debt. This is because I believe debt is a chain that keeps us from being able to pursue our dreams. Many people want it out of their lives, but don’t know where to begin.

    Maybe you looked at the example above and thought, “I have way more than $22,500 in debt! That will never work for me.” I’m here to tell you that it can work for you.

    You can pay off your debt as long as you have time, patience, and intensity! Now go and knock out that debt!

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