How to Crush Debt Like a Boss: The Debt Snowball

There are two highly effective ways to attack your debt: the debt snowball and debt avalanche, also known as debt stacking.  The main difference is the debt snowball focuses on paying off the smallest debt first, while the debt avalanche pays off the one with the highest interest rate first.  Click here to learn more about the debt avalanche.  Also, check out this debt snowball calculator to see which method will work best for you.

I'm going to be focusing on the debt snowball because that's the approach I used and it's what worked for me.  However, there's no right or wrong way.  It's what will get you taking action that's more important. If you need that small win first, then go for it!  At least you are paying off debt, instead of being stuck doing nothing because you can't decide which action to take. Just choose one and go!


The biggest advantage of the debt snowball is the mindset shift that occurs soon after you begin this strategy.  For starters, paying off your first debt is a major confidence boost.  This victory also serves as the motivation and momentum needed to start knocking out other debts!  


Watching each of my accounts decrease to a zero balance was exhilarating and empowering! After a short time, it even became fun and I found myself looking forward to the next payday so I could pay off more debt.  What worked for me was treating it like a game and for once I was finally winning! I had spent my whole life losing in the game of personal finance but with the debt snowball, these loan and debt companies (credit cards, student loans, banks, etc) were no longer making a profit off me. Seriously, who doesn't like winning at life?

How it Works:

List all of your debts from smallest to largest, including the total payoff amount and minimum payment for each debt.  Then you throw every extra penny you can find at the smallest debt, in addition to the minimum payment.  Better yet, instead of pennies challenge yourself to find at least $200 in your budget and apply this to your smallest debt, plus the minimum payment.  This should be easy now that we're living a minimalist lifestyle, budgeting and tracking our spending. 

After the smallest debt is paid off, then you roll that amount over to the next smallest debt.  The new payment on the next debt becomes the minimum payment plus the old payment on the debt you paid off, including the extra money.  Every time a debt is paid off, the new payment on the next debt increases and you gain momentum as you go down the list.  When you get to this point you'll find you're crushing it at paying off debt.

Now Let's Get to Work!

Here's my free debt snowball spreadsheet or if you want to print a copy click here to use Dave Ramsey's debt snowball worksheet.

Watch this video for more detailed information: